EUR/USD
The Euro initially pulled back slightly during the trading session on Wednesday, but we continue to see support underneath at the uptrend line. That being the case, I think that the market is trying to build a bit of a base, and that perhaps we could go higher. With the ECB having a press conference during the trading session on Thursday, this could cause a lot of volatility. Simply put, if the uptrend line holds, then this is a market that should continue to go higher. The 50 day EMA is just above, so it will cause a bit of resistance, but given enough time we should break through there. However, if we break down through the hammer from the Tuesday session, that could set up a test of the 1.13 level, and then eventually the 1.12 level underneath.
GBP/USD
The British pound has broken out during the trading session on Wednesday, slicing through the 200 day EMA, which of course is a very bullish sign. At this point, I would anticipate a short-term pullback but I also think that buyers will be willing to jump in somewhere closer to the 200 day EMA, which is substantively the 1.30 level. This being the case, the market is definitely a “buy on the pullbacks” type of scenario right now. This is because the Labour Party in the United Kingdom has suggested that they are willing to get behind a delay of the Brexit, which of course is good for the British pound in the short term. To the upside, I anticipate that the market will probably go looking towards the 1.32 handle, followed by the 1.3250 level. Obviously, it’s going to be very difficult to short the British pound in the short term.
