EUR/USD
The Euro went back and forth during the trading session on Wednesday, as we continue to see a lot of noise overall. The 1.1150 level has been an area of contention for some time as we have simply been consolidating between the 1.11 level underneath and the 1.12 level above. All things being equal I think we are probably better off avoiding this pair until we can get to one of the outer edges of this consolidation region. Furthermore, above the 1.12 level is 50 pips worth of resistance that is going to be difficult to overcome. With that, I like the idea of simply waiting until we get to the outer reaches of this 100 point range that we find ourselves stuck in and trying to play those for a return to the center. In other words, this is going to be very dull.
GBP/USD
The one thing that has been consistent during the Brexit situation is that Theresa May can throw the British pound into a tizzy at any given moment. Her attempt at getting the deal through the fourth time offering a potential referendum vote again has grown the markets all around, and it now looks as if it is only a matter of time before she resigns. Ultimately, this is a market that is looking for a floor, but right now we haven’t quite found it. I suspect that we could drift a little bit lower, perhaps down to the 1.25 handle. Otherwise, if we can break above the 1.28 level, then we could break out to the upside and go looking towards the 1.30 level. Ultimately, value hunters will eventually come back but right now we need a resolution to the PM.
