The EUR/USD pair rallied during the trading session on Thursday, breaking above the 1.25 level. This is an area that has a lot of resistance built in though, so it would not surprise me at all to see this market pull back. I think that the market is getting ahead of itself again, but I do believe in the upward momentum taking over longer term. At this point, I would not be a seller, but I would prefer to look at pullbacks as an opportunity to pick up value in a market that is obviously very bullish. I think that the market will continue to be a longer-term buying opportunity, but the recent surge may have been a bit overdone. If we can break above the 1.25 level, then I think the next target will be the 1.27 handle. Longer-term, I believe that the weekly chart continues to favor a move towards the 1.32 level, based upon the breakout of the bullish flag.
The British pound rallied during the trading session on Thursday, breaking clearly above the 1.40 level. The market then went to the 1.41 handle, where we should start to see a little bit of resistance. If we pull back from here, I think the 1.4 level should offer support, as this market looks ready to go to the 1.43 level after that. Longer-term, I believe that the market should break above there, but given enough time I think that we should see short-term pullbacks to pick up momentum. In general, I think that the 1.45 level will be the next target, so given enough time it’s likely that short-term pullbacks continue to be plenty of buying opportunities, perhaps adding to the longer-term move higher. I have no interest in shorting.