EUR/USD
The Euro has fallen rather significantly during the trading session on Tuesday, breaking down towards the hammer from just a few days ago. At this point, it looks as if the 1.13 level will be targeted, and I believe that short-term rallies are selling opportunities. At this point, I believe that the market is going to have a big fight on its hand in that area. If that level gives way, then the market goes down to the 1.12 handle and then eventually the 1.10 level. The markets will continue to be very noisy, and of course very confused as there are a lot of concerns with the European Union overall. Beyond that, the Federal Reserve is raising rates and that of course drives money into the US dollar itself. Because of this, it makes sense that we continue to see this market looking bit heavy. I have a couple of lines at the 1.1450 level and the 1.150 level, signifying the short-term ceiling.
GBP/USD
The British pound is at a very serious level right now, and if we break down below the general vicinity, we could reach towards the 1.25 handle. The candle stick on Tuesday really put a lot of bearish attitude in this market, because we have sliced through the previous downtrend line, giving up the idea of a trend change, at least in the meantime. While there are still bits of support near the 1.27 handle, if we break down below the bottom of the candle stick for the day it’s likely that we go looking towards the large come around, psychologically significant figure of 1.25 underneath. I would expect a fight there, but until the United Kingdom gets it together and puts on a united front for the Brexit negotiations, I don’t see a reason to be enthusiastic.
