The EUR/USD pair has initially pulled back slightly during the day on Tuesday, but then broke above the 1.2350 level later in the session. This was a bit of a “risk on” move, as the Chinese look to be trying to calm tensions with the United States. With the idea of a trade war being avoided, that puts more money into other currencies beyond the US dollar, and that of course moves this market. However, we are still within consolidation and I do not expect an explosive moved quite yet. The most important thing I am paying attention to is the uptrend line that continues to be respected. On short-term pullbacks, I’m a buyer and expect this market to go towards the 1.2450 level, which extends resistance to the 1.25 handle. A break above that level frees the market to go towards the 1.32 level longer term.
The GBP/USD pair had a very good session, reaching the 1.42 reason by the time the Americans had gotten a hold of it. It looks as if we are going to go towards the 1.4250 level, and then the 1.43 level. If we can break above that level, the market will then try to grind towards the 1.45 level after that. I believe that the 1.40 level underneath is massive support, just as it is not only a structurally supportive level, it’s a large, round, psychologically significant number and it has the 50-day exponential moving average just below it. Because of this, and the fact that the Bank of England is likely to raise interest rates this year, I believe the pullbacks will offer value the people are willing to take advantage of when it comes to the British pound. Selling isn’t much of a thought currently.