EUR/USD
The EUR/USD pair initially tried to rally on Tuesday but struggled at the 1.12 handle. By doing so, we turned right back around and ended up forming a shooting star which of course is a very negative candle. I believe that this market will continue to drop from here probably testing the 1.1050 level below. That area should continue to be supportive, and I think that a supportive candle in that general vicinity would be a nice buying opportunity. On the other hand, we could break above the top of the shooting star, which of course is a very bullish sign as well. At that point time the market should then try to reach towards the 1.13 level. Either way, I do think that we will get a lot of volatility, and quite frankly this market will continue to be choppy going forward.
GBP/USD
The GBP/USD pair initially tried to rally during the day on Tuesday but fell as well. In fact, we sliced all the way down to the 1.43 region and below. Because of this, the market should continue to go a little bit lower from here, perhaps reaching down to the 1.41 level. Ultimately, I believe that short-term rallies will be nice selling opportunities as it allows for “value” in the US dollar. Ultimately, this is a market that I have no interest in buying as I see nothing but massive resistance above.
The US dollar of course is favored just simply because we are concerned about global growth in general, and that of course is good for the US dollar as it is considered to be a bit of a “safety currency.” Ultimately, the market will continue to show a lot of concerns around the world, and therefore we should continue to see this market fall in general as the US dollar will be bought.
