The EUR/USD pair fell initially during the trading session on Tuesday but is starting to see a bit of support near the 1.22 handle. The area just below continues to show a lot of support, extending down to the 1.21 handle. I believe that the uptrend line that coincides with that area will also offer a bit of support, and we are currently trading around the 50-day EMA. I think that if we do fall from here, it should be a nice buying opportunity, if we can stay above the 1.21 handle. The 1.20 level underneath should be the “bottom” of the uptrend, and therefore I believe that we are going to see plenty of value hunters come into this market sooner, rather than later. Eventually, I anticipate that we will build up the necessary momentum to finally break above the 1.25 handle. I have no interest in shorting this pair if we remain above 1.20 below.
The British pound went back and forth during the trading session on Tuesday, as we continue to see a lot of interest around the 50-day exponential moving average. I recognize that the 1.40 level above will be resistive, and I prefer to see this market break above the Monday highs, shattering the top of the shooting star, before I start buying. I think that the market will then go to the 1.43 level above, and then eventually break out above there and reach towards the 1.45 handle afterwards. I believe the pullbacks of this point should continue to find buyers, but we could need to draw back towards the uptrend line. At this point, I believe that simply waiting for some type of bounce or a move to the upside is probably the best way to go. I have no interest in shorting.