EUR/USD Spikes On Brexit Day
Aside from the coronavirus X-factor, one can argue that the bullish breakout in the EUR/USD is a product of Brexit-stimulated participation.
The day that many thought would never come is now here ― Brexit Day. After 3 ½ years of negotiations, elections, and general unrest, the United Kingdom is scheduled to leave the European Union at 11:00 PM London time. It has been a long road for the GBP and EUR to get to this point. Now, as the U.K. and E.U. prepare to split, the EUR/USD is on the bull.
For the time being, the bids hitting the EUR/USD aren’t really attributable to much other than Brexit. Last night brought a collection of slumping E.U. GDP figures and the U.S. session featured a surprise uptick in the Michigan Consumer Sentiment Index (99.8). Aside from the coronavirus X-factor, one can argue that the bullish breakout in the EUR/USD is a product of Brexit-stimulated participation.
EUR/USD Breaks To The Bull
In a Live Market Update from Thursday, I issued a short trade recommendation for the EUR/USD. The play initially performed well, generating 22 pips profit. However, bidders dug in at the 1.1010 level and sent the market skyward, wiping out the stop loss.
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Now, it looks like all systems are “go” for EUR/USD bulls. Rates are marching north toward two key levels:
- Resistance(1): Big-Round-Number, 1.1100
- Resistance(2): Bollinger MP, 1.1109
Bottom Line: Now that Brexit appears to be finally happening, one has to wonder about the long-term implications for both the GBP and EUR. At least for now, forex traders are betting heavily on both currencies vs the Greenback.
If the rally continues in the EUR/USD, a counter-trend trade may set up by the closing bell. For the rest of the session, I will have sell orders in queue from 1.1094. With an initial stop at 1.1111, this trade produces a fast 15 pips on a slightly sub-1:1 risk vs reward ratio.
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