EUR/USD
The EUR/USD pair went back and forth during the course of the day on Tuesday as we continue to see quite a bit of volatility. The one thing that I am focusing on the most though is the fact that the 1.08 level has offered quite a bit of support. Ultimately, I believe that the market will probably turn back around and try to reach the top of consolidation near the 1.0950 level. I think that the market will more than likely be volatile regardless, and as a result you’re going to have to be able to deal with that kind of noise.
I think that there is a significant amount of support all the way down to the 1.07 level though, so I’m not necessarily interested in selling at this point. I think that the market will probably find buyers every time we drop down there, and I don’t really see anything on the horizon that’s going to move this market drastically although we do have an FOMC Statement today, so there could be a bit of a surprise coming out of Washington. Ultimately though, I think it’s probably more geared to go higher at this point.
GBP/USD
The GBP/USD pair initially fell during the course of the day on Tuesday, but found enough support to turn things back around and go higher. I believe that breaking above the 1.53 level does show some strength, but at the end of the day I see a massive amount of resistance that is more than likely going to appear at the 1.45 handle as it is a large, round, psychologically significant number.
I think that exhaustive candles above will be nice selling opportunities, and I have no interest in buying the British pound at this point as the US dollar is without a doubt the strongest currency in the world overall. It is not until we get above the 1.45 level that I will feel comfortable going long.
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