EUR/USD
The Euro rallied initially during the day on Tuesday, but ran into quite a bit of resistance just above the 1.11 handle. We did end up forming a shooting star and I believe this only signifies further that the bearish pressure is here to stay. I believe that currently the absolute ceiling in the market is somewhere near the 1.12 level, but eventually we will build up enough downward momentum to break down and extend losses. Perhaps even go as low as the 1.05 level given enough time, due to the fact that it has been an area of interest in this market over the last several months.
It is not until we break well above the previous uptrend line that I would consider buying the Euro, and quite frankly I just don’t see that happening anytime soon. There are far too many issues in the European Union and of course uncertainty and the market absolutely hates both.
GBP/USD
The British pound rose during the day on Tuesday, and what can best be described as a “relief rally.” After all, the market had been falling rather precipitously over the last several weeks, and eventually people had to start taking profit. At this point though, I don’t see any reason why a rally should last any significant time, and most people have been calling for some type of bounce. I think we’re starting to see back, and now it’s only a matter of time before we see an exhaustive candle that we can start selling.
I have no qualms whatsoever about selling this pair soon as we get a sign of an exhaustive candle, or any other type of negativity. I believe that there is a massive amount of resistance between the 1.35 level and the 1.3650 level, in the form of the gap. Either way, I feel this is a market that can only be sold and not by.
