EUR/USD
The Euro rallied significantly during the trading session on Tuesday, reaching towards the 1.16 level again. There is a certain amount of significant memory attached to the 1.15 level as it was massive resistance previously. It was the scene of a major break out, back in June of last year. We are now testing that area again, so I think that there will be a lot of interest in this region. If we can stay above the 1.15 level, the market is likely to go looking towards the top of the overall consolidation area, which would have it looking at the 1.1850 region. I think that during this time of year, and makes sense that we simply go sideways, so keep that in mind. I believe that the market breaking above the 1.1850 level then opens the door to the 1.20 level, followed by the 1.22 handle. If we do break down, we will probably go looking towards the 1.13 level.
GBP/USD
The British pound initially tried to rally during the trading session on Tuesday, but then turned around to form a shooting star. The market is sitting on top of the gap from August of last year, which I have marked at 1.29 below. This is a bit of a support “range” that I have been paying attention to, although it is certainly under serious threat. If we can balance from here and retake the 1.30 level, I think the British pound may try to make a significant turnaround. However, the biggest thing that comes into play with this market is going to be headline risk coming out of the Brexit and of course political bickering in the United Kingdom itself. Because of that, I would expect a lot of noise.
