EUR/USD
The EUR/USD pair initially tried to rally during the course of the session here on Tuesday, but as you can see we fell rather significantly to not only fill the gap, but break down below it. Because of this, it makes sense that the Euro will more than likely try to grind lower. However, there is a lot of support just below and extending all the way down to at least the 1.12 level, so at this point in time I am not comfortable selling this market. On top of that, we have the EU referendum being voted on in the United Kingdom, and that of course has quite a bit of influence on what could happen in the European Union. At this point in time, it makes sense that more people will want to own the US dollar, as it will represent a form of safety.
GBP/USD
The British pound initially tried to rally during the course of the day on Tuesday, reaching towards the 1.48 level. However, that area has been very resistive, and it makes sense that we wouldn’t be able to break above it as we are waiting for results from the EU referendum vote in the United Kingdom. Ultimately, it’s likely that we won’t get a lot of headlines over the next 24 hours that could move this market, as there is a lot of concern as to whether or not the UK will leave the European Union, and the vote of course is still a bit tight at this point in time. With this, the market will more than likely try to find some type of “heads up” when it comes to what could be happening in the United Kingdom.
The fact that we ended up forming a shooting star suggests that perhaps this pair is going to pull back, and it makes quite a bit of sense that the pair would do so as it looks a bit overextended at this point in time. However, don’t expect any big moves until we get final answers.
