EUR/USD
The EUR/USD pair fell rather significantly during the course of the day on Friday as the United Kingdom voted to leave the European Union. Because of this, the Euro of course lost a bit of strength, as it appears that there are real fears as to what the future of the European Union is. After all, they just lost the second largest economy in the region, and that of course means that the European Union suddenly finds itself quite a bit weaker. On top of that, there are several other countries around the European Union that are kicking around the idea of referendums, and as a result it’s very likely that there will continue to be negative pressure on the Euro going forward. Short-term rallies that show signs of exhaustion should continue to be selling opportunities.
GBP/USD
The British pound of course fell rather drastically as the British people chose to leave the European Union. We sliced through the 1.41 level without any hesitation whatsoever, and now have reached fresh, new lows. With this, the British pound will continue to fall going forward, but we could have a significant amount of a bounce as we had reacted so negatively to the downside. Ultimately, the 1.41 level should continue to be resistive, and as a result an exhaustive candle will be an opportunity to continue to sell the British pound as it has to be revalued at this point in time.
The size of the candle is of course very large, and that of course means that there is a significant amount of bearish pressure in this market, and that being the case it’s very likely that every time we rally we will begin looking for selling opportunities again and again. At this point in time, we should continue to see this market fall regardless of what happens, but do keep in mind that there is going to be a lot of volatility in the meantime.
