EUR/USD
The Euro broke below the 1.13 level during the trading session on Tuesday but bounced just a bit to show some signs of support at the end of the day. However, as we continue to see more choppiness, I suspect that this is going to be the domain of scalpers at best, as there is so much support underneath. Simply put, the market doesn’t move in any one particular direction more than about 30 minutes in this pair, and I think it’s going to continue to be a major problem for traders. I would wait for some type of significant rally to start shorting and wouldn’t be bothered with anything in this area. I think that we could go as low as 1.11, but eventually the buyers would come in based upon value at that point. Without a doubt, the high-frequency traders have started to take over this pair.
GBP/USD
The British pound fell during the trading session again, reaching down towards the 1.27 level, but that’s also an area of major support. If we can break down below there, then the British pound would be in serious trouble. At that point, I would anticipate that the markets will drop to the 1.22 level underneath based upon the shape of the descending triangle, and it certainly looks as if it is only a matter time before we see that move. Rallies are to be faded, and I don’t see any reason to buy the British pound until we get a substantial deal with the Brexit. Parliament looks very unlikely to pass the proposed deal between the European Union and Teresa May, so I think a no deal Brexit is coming.
