The Euro rallied rather significantly on Wednesday, as we reached towards the 1.14 level. However, this is an area that continues to find a lot of resistance, and we are in the process of forming a bit of a symmetric triangle. Because of this, I anticipate that it’s only a matter of time before we see sellers jump back into this market, pushing it back down towards the 1.13 level. This is a choppy marketplace, and that makes sense as we are trying to figure out what the Federal Reserve is going to be doing, which obviously is a huge influence on the greenback itself. The Italians have given into ECB demands of putting out a 2% budget, but overall we are still in a downtrend. I think we simply chop back and forth between the 1.1450 and the 1.1250 range for the rest of the year.
The British pound has skyrocketed during the trading session on Wednesday, as Teresa May got a favorable vote out of Parliament. However, there are still all of the same issues facing the Brexit as there were before, so I think the 1.27 level will in fact offer major resistance, as it has previously been support. I fully anticipate that rallies are to be sold, and that it will be very difficult for this market to continue to go higher. I think quite frankly, we still look very likely to go lower, perhaps down to the 1.22 handle over the longer-term based upon the descending triangle that I have marked on the chart. I have no interest in buying the British pound until we have some type of deal or at least a good chance that a deal involving the Brexit.
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