The Euro rallied significantly to kick off the day on Tuesday, but turned around to form a massive shooting star, just below a major downtrend line. Ultimately, the market looks as if it is continuing to struggle to go higher, so I think a pullback is probably about to happen. Ultimately though, I think there is a massive amount of support below the 1.15 level, so the downside is somewhat limited as well. If we do break out to the upside, the 1.18 level could be challenged, but expect a lot of selling in that area as well. The next 24 hours to look like they are likely to be a bit bearish though, which makes sense as markets continue to worry about emerging market exposure of European banks, and of course so many other questions around the EU. I don’t think this is going to be a major pullback, just simply a market correction.
The British pound went back and forth during the day, essentially treading water just above the 1.3125 handle. This is a fairly neutral candle, I think at this point though we are probably looking at a short-term pullback to build up enough momentum to continue going higher. Obviously, Brexit headlines will come into play but I am not interested in shorting this market right now. I think that we have clearly broken a couple of resistance barriers, so it’s only a matter of time before we get the catalyst to continue going higher. I believe that the 1.30 level will now act as a “floor” in the marketplace for the uptrend. I believe a lot of smart money has been buying the British pound at these historically cheap levels anticipating some type of agreement.
This article provided by NewsEdge.