EUR/USD
The Euro initially shot higher during the trading session on Tuesday but ran into a buzz saw of selling at the 1.14 handle again. Between there and the 1.15 level, there is a lot of noise and I think it’s only a matter of time before the pressure comes back into the market. We did of forming a very nasty looking candle, so I think that it is only a matter of time before we sell off on rallies using short-term charts. The 1.11 level underneath is massive support, so I think essentially what we are looking at is a market that is going to bounce around between the 1.15 handle on the top and the 1.11 level on the bottom. This market will continue to be very noisy, so focus on short-term charts and don’t expect much.
GBP/USD
The British pound had a wild ride during the trading session on Tuesday, initially shooting much higher based upon twitter headlines, but then turned around as Parliament found the government of Teresa May in contempt in a recent ruling. Because of this, it has made the situation in the British pound even more tenuous, and I think it’s probably only a matter time before we sell off. We did a lot of technical damage to the support underneath but it did in fact hold. If we break down below the lows of the trading session on Tuesday, then I think we make that move to 1.22 that the descending triangle suggests. Rallies at this point still are not to be believed and should be selling opportunities. In fact, I don’t have any interest whatsoever in trying to buy the British pound.
