The EUR/USD pair was choppy and quiet during that trading on Wednesday, as we continue to do very little. The 1.24 level above has offered resistance, and I think that resistance extends to the 1.25 handle. When we finally break above that level, the market will be ready to go much higher, perhaps extending to the 1.32 level. However, until then I think there is a high probability of the occasional pullback. I suspect that the 1.22 level underneath is support, and that the bottom of the uptrend is the 1.21 level underneath. I like buying dips in the market, but quite frankly this is more of a short-term range bound trading type of opportunity that we see ahead of us. The market has been very difficult to make money in lately, at least for anything more than a small move.
The British pound has initially tried to rally during the trading session on Wednesday, but then broke down towards the 1.42 level. There’s an obvious uptrend line underneath though, and of course the 20 SMA which is in the middle of the Bollinger Bands indicator. I believe that eventually we will see this market go higher, but this pullback is probably necessary to build up the necessary momentum to continue going higher. If we break down below the uptrend line, then I would have to reset and reevaluate the entirety of the move, but right now I believe that the market will fully intend to go to the 1.45 handle, but it may take several times to break out of this and to that level. The choppiness in this market makes quite a bit of sense, because we are trying to continue to go higher, and it will take several times to finally clear this noise.