The Euro initially tried to rally on Thursday but then broke down through the 1.15 level to reach towards 1.1450 level underneath, an area that has recently caused a bit of a bounce. However, this is a market that looks like it is still fairly week, so I would not be surprised at all to see it continue to go lower. At this point, I think that breaking below the hammer from last week could send this market down to the 1.1350 level where we found buyers previously. The alternate scenario of course is a daily close above the 1.15 handle, then it would show a little bit more in the way of confidence. The nonsense going on with the Italian budget conflict and the ECB is certainly not helping the Euro, and we continue to see people shun the currency as a result.
The British pound has initially tried to rally during the trading session on Thursday, but then rolled over to reach towards the 1.30 level. That’s an area that I think is somewhat crucial, so if we can stay above that general region, then I’m not overly concerned. We have recently broken above a significant downtrend line, and quite frankly that normally leads to a lot of choppiness in a market going sideways for a while. At this point, I believe that a lot of people are trying to weigh upon the idea of whether or not there’s even going to be a Brexit deal, which the overly dramatic headlines on twitter and other places certainly is not helping the situation at all. One thing I would point out though is that every time this pair sells off duty one of those headlines, like we may have during the day here on Thursday, we seem buyers come in and pick it back up. This is a longer-term trade, but it could be a nice buying opportunity if we can stay above the 1.30 level.
This article provided by NewsEdge.