EUR/USD
The Euro initially tried to rally during the day on Tuesday, but found enough resistance to the 1.12 level to turn things around and form a bit of a shooting star. I believe that the market should continue to go lower based upon that, mainly because we are in such a strong downtrend. I’ve also been talking about the 1.10 level as a bit of a magnet for the market, and I believe that we will eventually work its way down there. I think that the key here is going to be selling short-term rallies that show signs of difficulty above. In fact, I don’t think it’s not until we get above the 1.1250 level that I can consider buying. Ultimately, it’s going to be volatile, but I believe there still a negative bias in this market.
GBP/USD
The British pound initially tried to rally during the course of the day on Tuesday, but the 1.47 level has caused enough resistance to turn the market back around. What started this selloff was a recent poll suggesting that the idea of leaving the European Union is starting to pick up momentum, and that currently 52% of the British public prefers leaving the EU. This of course has negative implications on the British pound in general, and as you can see the markets somewhat freaked out due to this information.
At this point in time, looks as if we will probably try to continue going lower but you also have to keep in mind that it’s only a matter of time before we get another poll that perhaps could suggest the exact opposite. That would be very bullish for the British pound, so this point in time it’s probably best to simply stand on the sidelines at this point in time as we are literally trading from one headline to the next when it comes to the British pound.
