The U.S Stock market continued to plunge on Tuesday as the U.S. Defense Ministry is waiting for the ‘go-ahead’ signal from the U.S. President to attack Syria in order to target the Syrian rebels or government who are using chemical weapons. The missile strikes are expected to be initiated as early as this coming Saturday, which could further escalate the killings and crisis going on in Syria.
The speculation based on this is that the oil production and supply from Syria could halt and that already has led to a sharp increase in the Crude Oil prices, whereas the S&P 500 index fell from 1656 area to 1626 after breaching its support levels at 1640 and 1630.
The euro fell drastically in the European session based on this same news, despite the German Ifo Business Climate showing a significant improvement in the economy as the data came much better than the previously recorded figure in July. Later on in the U.S. session, the Consumer Confidence of the U.S. economy boosted up to the reading of 81.5 against the expected figure of 79.6, after which the EUR/USD bounced back from its support level at 1.3333 and is currently trading at 1.3390.
Provided it breaks 1.3400 then it would target 1.3408 and 1.3422, whereas it would remain a safe pair to buy as long as it trades above 1.3333.
The British Pound plunged severely on Tuesday where its move was solely based on its technical levels, as it failed to move above its yesterday’s pivot point 1.5586 so it kept falling and bounced back from the 1.5478 support level in the U.S. session.
There were no fundamentals due for the GBP yesterday; however, BoE Governor Mr. Carney is set to speak today in the European session where the pair could show high volatility during his speech.
Traders should remember that the pair is still in the bearish zone, so it would be totally fine to short this pair as long as the pair trades below the critical resistance level of 1.5602. If it manages to break the support level of 1.5517 then its next target would be 1.5505 and then yesterday’s low of 1.5478.
On the other hand, traders could scalp the pair if it breaks above 1.5561 because it would attempt to test 1.5573 and 1.5586 where sellers may start entering the market again.
To contact the reporter of this story: Jonathan Millet at email@example.com