EUR/USD
The Euro rallied again during trading on Tuesday but struggled above the 1.17 level. By doing so, we are forming something akin to a shooting star, and it’s likely that we will see some selling pressure into the market. think that we will probably roll over a bit, if for no other reason than to find more value so that we can perhaps continue higher. However, we have definitely outdone ourselves in very short order, so I would not anticipate an ability to continue to extend to the 1.18 level above. If we can break above the 1.18 level, then I think the market could go much higher. However, I think that the next day or so will probably show some signs of weakness that short-term traders will come in and take advantage of. Longer-term though, I think we will find buyers underneath.
GBP/USD
The British pound has turned around after initially trying to rally during trading on Tuesday, as we continue to see resistance near the 1.29 level. Because of this, the market looks as if it is ready to drift back a little bit after the recent rally, and we are most certainly in a downtrend, so this is the easier trade to take anyway. I think the 1.2750 level underneath is support, but we will probably have to retest that area to ensure its firmness, and if it gives way that would be a very bad sign indeed. I think that we are trying to form some type of bottom here, but I think the process of course will be noisy as per usual. I’m a buyer of dips, but I recognize the next day or two could be a bit soft.
