EUR/USD
The EUR/USD pair continue to rally on Friday, as we have broken out over the last several sessions. Now that we have broken above the 1.15 handle, I feel that this market will continue to offer opportunities for people to get involved on pullbacks, as it will offer value in a market that is breaking out to the upside. Given enough time, the market should then go looking for the 1.1850 level above. I suspect that we are massively supported underneath, probably extending all the way to the 1.1350 level, so I look at this is a market that is a simple “buy on the dips” type of situation. I believe that the markets will continue to grind higher over the next several weeks, but given enough time I think that those who are bullish will be profitable.
GBP/USD
The British pound broke out during the week, but since then has fallen below the 1.30 level. This shows just how messy this pair is going to be, but I think if we can close on a daily candle above the 1.30 level again, the buyers will come back into the fold. Otherwise, if we break down below the 1.2850 level, the market could very well fall apart. I think that this next week or 2 will be very important for the British pound, so pay attention to both of those areas. Personally, I think that we still have a good shot at going higher, but there are several issues out there that could move this market rather rapidly, not the least of which would be that the divorce proceedings between the European Union and the United Kingdom will cause headlines to cross the wire that might make people nervous. Currently, it’s probably safer to buy the EUR overall.
