EUR/USD
The Euro went back and forth during the trading session on Wednesday, as we continue to dance around the 1.12 handle. This is an area that causes the lot of consternation in the market as it was previous support and should now be resistance. The daily candle shows more confusion as well, so at this point I think you’re probably looking at a scenario where choppiness is to be expected.
That being said, the reality is that we had a couple of shooting stars form in a row at higher levels, so it makes sense that it’s easier to fall than rally from here. If we do break down a bit, I suspect that the market will find support at the 1.1150 level, and then down at the 1.11 level. A break of that level could open the door to the 1.10 level which would be a significant move lower. At that point, I would expect to see a lot of support though. As far as buying is concerned I don’t have any interest, at least not until we break above the Monday candle.
GBP/USD
The British pound continues to fall, as the Wednesday session sees the market break down below the 1.2850 level. There is support underneath though, especially near the 1.28 handle. Because of this, and the fact that it would be chasing the trade, I have no interest in shorting the market anymore. I’m waiting to see whether we can get some type of supportive daily candle in order to rally. However, I am going to be very cautious about jumping into the market as there are a lot of issues involving the Brexit that still could jump into the market and cause issues. I will be very cautious and pragmatic about looking for a buying opportunity.
