EUR/USD
The Euro initially tried to rally during the trading session on Tuesday, but then fell rather hard to reach the lows of the previous week. That being the case, the market looks likely to reach down towards the 1.1250 level, the beginning of massive support. Because of this, I believe that we will see buyers underneath that will continue to lift this market, as we have gone back and forth between 1.12 on the bottom and 1.15 being the top of that same range. At this point, we continue to see a lot of choppiness and back-and-forth trading, but as we are getting close to the support level, it makes sense to be looking for some type of bounce to take advantage of. Ultimately, I suspect we will not be able to break down through the 1.12 level as it is so structurally important.
GBP/USD
The British pound has been very wild and all over the place for the last couple of days, but I do think that we will eventually go looking towards the 1.3350 level above, and then possibly even the 1.34 level. At this point, the 1.30 level underneath should continue to be support, so therefore I like buying dips. I understand that there is going to be a lot of headline noise out there that the machines will continue to go back and forth, but at this point it’s likely that we are trying to build up enough momentum to finally break out to the upside, and then reached towards the 1.35 handle after that. If we do get that breakdown, that will all but eliminate any doubts to a longer-term trend change. At this point, I have no interest in shorting the Pound.
