The Euro initially tried to rally during the trading session on Thursday but struggled at the 50 day EMA. By doing so it rolled right back over to dig into the previous buying pressure from the Wednesday session. Beyond that, there is a lot of interest between the 1.12 level on the bottom and the 1.1250 level. This is a market that has a lot of demand down in that area so it makes sense that we see a hesitation to break down further than that. I think at this point it’s only a matter time before value hunters come in and push this market higher, but if we were to break down below the 1.1150 level underneath, it’s likely that the market would break down significantly. I don’t see that happening though, but at this point it’s obviously going to be more of a grind higher than anything else. You need to be very patient.
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The British pound initially tried to rally during the trading session on Thursday, but then rolled over to break down towards the 1.3050 level. There is massive support underneath at the 1.30 level, so if we were to break down below there significantly we could probably go down to the 1.28 handle. Although I believe that we will probably bounce from here, the highs continue to get lower so that is not a good look when it comes to the British pound.
If we can clear the 1.31 handle, then I might consider putting on a long position, as we have been consolidating between the 1.30 level underneath and the 1.3350 level above. In general, this is a market that is consolidating, but with all of the noise going on with the Brexit, it’s almost impossible to feel confident about trading.
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