EUR/USD
The Euro fell during the course of the day on Wednesday, testing the 1.10 level below. Because of this, looks as if the market is trying to break down significantly but I would not be surprise at all to see a little bit of a bounce from this area as this area is of course so significant. If we do get that bounce, I’m looking for signs of exhaustion on short-term charts in order to start selling again as those rally should offer “value” in the US dollar overall. If we can break down below the 1.10 level below, I feel that the market will then reach down to the 1.09 handle, and then perhaps even lower than that.
GBP/USD
The GBP/USD pair went back and forth during the course of the session, forming a hammer like candle. Because of this, I believe that sooner or later we will rally, but given enough time I feel that we will form a bit of an exhaustive candle, and as a result it sooner or later going to offer a selling opportunity. The 1.20 level below is essentially the “floor” in this market, so having said that I feel that the market is one that you can only sell, and given enough time you can probably do it several times over as the British pound of course is still struggling due to the vote to leave the European Union.
On the other side of the equation we have the Federal Reserve looking to raise interest rates sometime in the near future. If we do that, the US dollar of course will continue to strengthen. With that being the scenario in this together market, I don’t see how you can buy this pair yet, and as a result selling short-term charts again and again will probably be the best way to go.
