What can we say about the market today? Awesome, sad, impressive or the reaction was foreseeable? One thing is certain, however: Traders were able to get a substantial slice of the pie. From our point of view, the nighttime trading went very well. We achieved a reasonable profit with each of our entries in both currency pairs and we are therefore more than satisfied with our performance. Incidentally, our biggest single gain last night was a 420-pip profit, which was recorded by our short-entry in the GBP/USD.
The pound sterling crashed as the U.K. voted to quit the European Union. The first reaction has led to a massive sell-off in the pound. The euro moved in tandem with pound while the euro’s trading range was confined to 500 pips (5 percent), whereas the pound’s range extended to 1700! pips (17 percent). The pound’s downward move is the biggest drop of all time as Britain’s future is highly uncertain after the vote to exit the EU. The next steps are unclear, EU leaders and finance ministers could confer as soon as this weekend. The future path of the EU and U.K. is clearly subject to downside risk, this is the only (sad) certainty at the moment.
EUR/USD downside risks: If the euro breaks below 1.0890, a next support could be around 1.0820. Below 1.0780 the euro could tumble towards 1.0710 and 1.0560.
The storm in the Forex market is not yet over and traders should be cautious. If you already gained a good weekly profit then stop trading for this week. If you don’t mind getting your fingers burnt, then go ahead.
We say goodbye to this fateful week and wish you a wonderful weekend.
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