EUR/USD
The slaughter continues with anything not labeled “USD.” We’ve broken pretty significant support in the EUR/USD pair, but there is significant support just underneath as well. I think the 1.13 level which acted as such support during the last meltdown should hold, unless of course something deteriorates rapidly. I think we are starting to get a bit overdone when it comes to the panic, as this is not 2008. Certain algorithmic programs will eventually kick in and start picking up things that are either overbought or oversold. Pay attention to bond yields in America, that’s probably the biggest driver of this in the future. I would anticipate some type of bounce, but I would also be very cautious about it. I think both the Euro and the Pound are just about untradeable.
GBP/USD
Speaking of the British pound, you can see that we continue to sell off, breaking below the 1.29 level during the session on Wednesday. The market continues to fall straight down, and perhaps this is the way the market is going to punish the politicians in the United Kingdom, who seem hell-bent on arguing with each other instead of trying to get some type of decent Brexit. With that being the case, confidence in the British pound is at zero currently, which is a bit of a contrarian indicator. However, I would need to see a couple of days of stability at this point to feel good about buying unless of course it was a minute position with low leverage, giving me the opportunity to build up a longer-term position to the upside. Right now, I think it’s only a matter of time before we bounce, but can we trust that? Probably not as the algorithmic traders are jumping in every time there is a headline.
