The Euro rallied significantly during trading on Tuesday, as we broke above the vital 1.15 level. We are now approaching the 1.16 handle, an area that was the beginning of significant selling a couple of weeks ago. I don’t know whether we can break above there, but it certainly looks as if it is going to be an area of interest. I think the market could roll over from here, perhaps testing the 1.15 level, and it should be stated that at the end of the day the risk appetite of Americans looks as if it is falling at the vital 3 o’clock hour. If that’s the case, this pair will probably unwind right along with it. At this point, I anticipate that we will see a bit of volatility, but if we were to break down below the 1.15 handle, that could send this market much lower. There are still a lot of concerns when it comes to Turkey, so keep that in mind.
The British pound also rallied during the trading session on Tuesday, reaching towards higher levels than we have seen for several days now. That’s a good sign, and quite frankly I believe that this should be measured within the realm of US dollar weakness more than anything else, so I don’t get overly excited about this. I believe that the British pound is a bit unique in the sense that it has the overhang of Brexit, so even if the US dollar were to fall overall, is very possible that this pair will underperform at the very least. That being said, I think that if the US dollar starts to strengthen against most currencies around the world, this is a great market to start selling.
This article provided by NewsEdge.