EUR/USD and GBP/USD Forecast - 4 December 2018
The Euro had a back and forth type of trading session on Monday as traders came back from the weekend. There was a certain amount of optimism due to the United States and China coming to a cease-fire in the trade war. The markets optimism seems to be all over the place though, because we also have to worry about the situation in Europe, both economically and politically. Because of this, I think we are going to continue to see a lot of noise in this pair and essentially a “flatlining” of price. I believe that the 1.15 level above is massive resistance, while the 1.11 level underneath is massive support. I believe that the market continues to go back and forth in short term choppiness, as high-frequency traders will continue to kick the Euro back and forth.
The British pound initially got a bit of a rally going as well, due to the “risk on rally.” The market then turn things around and sold off the British pound. The British pound turned around and reach towards the 1.27 level, an area that has massive support. The massive support giving way sends the market much lower. It’s an ascending a descending triangle that measures for a move down to the 1.22 handle underneath, which of course is an area that we have seen a lot of action in previously. Ultimately, I think that every time this market rallies, you should be looking to sell the British pound as it has been so soft are so long and of course there is a high likelihood that the negotiations in Parliament will continue to push headlines in a very negative attitude for this market. Ultimately, I think it’s only a matter time before we break down.