EUR/USD
The EUR/USD pair rallied at the very beginning of the trading session on Wednesday but found the 1.24 level to be far too resistive. We pull back from there to reach down towards the 1.2350 level, an area that coincides with the 50-day EMA. That is an area that has been important in the past, and it does look like we are ready to go higher given enough time. I think that the 1.2275 level will be significant support as well, and of course we have the 1.21 level underneath still offering the “floor” in the market. I also recognize that the 1.25 level above is massively resistive, so break above there would be a very bullish sign and send this market into a longer “buy-and-hold” scenario. However, we are going to need to see a lot of momentum in this market to do that.
GBP/USD
The British pound initially fell during the day but bounced from the downtrend line that now should offer support, and it certainly looks as if it is. We ended up forming a bit of a hammer, and if we can break above the 1.40 level, I think that the British pound will continue to go higher over the longer term. By doing so, the market should then go to the 1.43 level longer term. I think that short-term pullbacks continue to be buying opportunities, and it should be pointed out the 50-day EMA is sitting right here as well. I think given enough time, the British pound will break out to the upside. If we can clear the 1.43 level, I think that the market can continue to go much higher. I expect choppiness, but if you keep a low levered position, you should be able to hang on.
