The Euro fell during most of the session on Tuesday but bounced from the crucial 1.15 level underneath. That is the bottom of the overall consolidation, and it makes sense that people would be interested in this market down to that level yet again. We haven’t quite formed a hammer, but it’s pretty close. I think that we will eventually continue to grind higher, perhaps reaching towards the 1.17 level, perhaps even the 1.18 level which was the top of the entire range. I like the idea of buying, and I think at this point it’s probably a better trade anyway. However, if we were to break down below the 1.1475 region, I think that could signal that we are going much lower. At this point though, I believe we are oversold more than anything else.
The British pound also fell during trading on Tuesday, breaking below the 1.30 level. That of course is a negative sign but we are not down below the previous downtrend line quite yet. I would be a bit cautious about going long of this market right here, but I would also be cautious about shorting. I think there is obvious demand below at the previous downtrend line and it also cuts sideways across to the 1.29 level where we had seen an explosive move a couple of weeks ago. In other words, it’s more confusion than anything else. I do believe in this pair longer-term to the upside, but obviously we need some type of catalyst which of course would be more than likely revolving around the Brexit. One thing is for sure though, the British pound has been rather resilient so I keep that in the back of my head.
This article provided by NewsEdge.