The European Union and Great Britain are looking over the cliffs

In Europe the situation is dire. The European Central Bank is giving us more and more dovish signals. Benoit Coeure and Francois Villeroy de Galhau governing members of the ECB have both stated that the slowdown in the European Union is significant and that the interest rate may need to be altered. This week members of the ECB, BoE, FOMC, BoC and RBA are giving speeches. We look forward to their guidance and a spike in volatility for their respective currencies.

Prime Minister Theresa May is having a hard time convincing politicians at home. She has turned to the EU for support on her wishes in the Brexit agreement because her Ministers at home are non-compliant. The pound gapped up on Monday and then closed the gap by 10 am +3 GMT. It is once again trading above the 200-EMA on the 1hr timeframe.

We remain bearish on the Pound but do not recommend entering a swing trade while price remains above the 200-EMA on the 1hr timeframe. A scalp trade is possible from above the EMA to the Fibonacci level of 38.2% at the price of 1.28685.