EUR/USD
The Euro initially tried to rally during trading on Wednesday, breaking above the 1.12 level at one point. However, the level has offered a bit of resiliency again, which is something that we have seen for several days in a row. This is the beginning of the previous support so it makes sense that it should be resistance now. I don’t think that the Euro will pick up any serious traction until we can get above the 50 day EMA which is in red on the chart. If we get that move, then we could very well go quite a bit higher. However, more likely the case is going to be that we roll over from here and go looking towards 1.1150 level, possibly even the 1.11 level.
GBP/USD
The British pound fell during the trading session as well, as we continue to see a lot of weakness in the Sterling. We are currently dancing around the 1.30 level, an area that obviously will attract a lot of attention. That being said, it’s very likely that we are going to reach down towards the 1.29 handle, which has seen quite a bit of support there as well. I think this pair is going to be difficult to trade for the foreseeable future, because quite frankly we are moving around based upon headlines and rumors when it comes to Brexit.
On the other side of the equation we have the US dollar which has been strong, so I do think there is more of a downward proclivity in the short term, but I believe that eventually we will look back at these levels as being the beginning of the complete turnaround of the trend. We are historically cheap right now.
