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Christopher Lewis

The Euro rallied a bit during the trading session on Thursday, showing signs of noisy behavior in reaction to the headlines that officials are becoming more optimistic about a Brexit deal. Having said that, we have seen this movie more than once, so you cannot necessarily place a trade based upon this. Numerous times over the last couple of years we have seen Brexit fever hit, and then tear the market apart as soon as somebody comes out to suggest it is not settled. I anticipate that there is a significant chance of that happening again but need to see some exhaustive short-term trading action in order to start shorting again.

EUR/USD Video 02.10.20

At this point, it is obvious that the market is still very skittish about all things Brexit related, so it is most certainly worth paying attention to from a higher time frames standpoint. At this point, we are testing the previous uptrend line that was recently broken. You have to ask yourself whether or not this is going to be resistance? Most of the time it does turn out to be so. That being said, this is extremely news driven and news driven events tend to be very emotional to say the least. I anticipate that we will see another round of selling, but you may need to be on the sidelines a moment before that happens. If the Euro drops below the 1.17 level, I suspect that there will be a significant amount of capitulation. I also recognize that the 1.18 level could be resistance as well.

For a look at all of today’s economic events, check out our economic calendar.

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