EUR/USD
The Euro broke apart during the trading session on Wednesday as traders came back to work, as the US stock markets rallied a bit. This put upward pressure on the US dollar, and it looks as if the market is going to continue to show signs of volatility as we bounce around between the 1.1450 level on the top and the 1.1250 level on the bottom. The market continues to go back and forth overall but it does look as if we are trying to make “higher lows” over time. With that in mind, I believe that the market will continue to be very choppy and difficult to deal with, and therefore I think it is something that you should approach with a short-term attitude in mind. I believe that as we are at the end of the year, it makes sense that we will get a lot of position squaring, and therefore a lot of back and forth trading.
GBP/USD
The British pound broke down during the trading session, showing the 1.27 level as resistance again. I believe that this market is destined to go down to the 1.22 handle given enough time, but it may take a while to get there. Brexit headlines and fears of course come into play, but the Federal Reserve softening its stance has given the British pound a small lifeline. Nonetheless, I think that it’s only a matter time before the British pound sells off again, and I don’t have any interest in buying it. The 1.22 level is based upon the height of the descending triangle, and there is nothing on the chart that tells me it’s any different. The red EMA, which is the 50 day EMA, is a very negative sign.
