EUR/USD
The Euro went back and forth during trading on Tuesday, as we are continuing to tread water will within the symmetrical triangle, and I think it’s only a matter of time before we need to make some type of decision. When we stay in these consolidated areas though, it’s difficult to do much. I think if we can break above the downtrend line, then the market is very likely to go to the 1.1850 level, and I suspect that is probably what’s going to happen. However, I would not try to front run this move, and I think you should be very patient. If we do break down, I believe the 1.15 level is massively supportive. In general, this is a market that I think is trying to form some type of base, but these things can take an age.
GBP/USD
The British pound rallied a bit during the trading session on Tuesday, clearing the 1.31 level again, and looking likely to test the 1.32 handle. This is a market that I think has started to see a significant amount of demand come into the marketplace, based upon the psychologically and structurally important 1.30 level below. At this point, it looks as if the market will go looking towards 1.33 handle above, which is an area where I think there is going to be significant resistance, perhaps just short of that level. I believe that there is a lot of volatility just waiting to happen above that could hurt the British pound, especially considering that a lot of it is politically base. However, I think we are trying to base over here as well, and longer-term traders may be starting to accumulate Sterling to take advantage of the turnaround.
