The EUR/USD pair fell a bit during trading on Thursday but continues to find support just below the 1.23 level. I believe there is also some stringent support to be found near the uptrend line on the chart, and of course the 1.21 level underneath that. Because of this, I think it’s only a matter of time before the buyers return and therefore I remain bullish. I recognize that it will continue to be choppy, but when you look at the totality of the last couple of months, we have essentially gone sideways more than anything else. The 1.25 level above continues to be massive resistance, but I think that breaking above there is going to take a lot of work. I believe that essentially the market is looking at trying to build up enough momentum to do that exact move, but in the meantime, it will continue to be very choppy.
The British pound has fallen during the trading session on Thursday but remained above the vital 1.40 level. I believe that the 1.40 level is structurally important, just as it is psychologically important. The 50-day EMA sits just below, and the fact that we started to bounce a bit towards the end of the day, suggests to me that we are going to rally from here. The 1.42 level will be targeted, followed by the 1.43 level. I think if we can break above there, the market then goes to the 1.45 handle.
If we break down below the 50-day EMA, it’s likely that we will drift lower, perhaps down to the 1.38 level. The uptrend line underneath continues to offer longer-term support, so I believe that we are still technically in an uptrend until we break down through that.