EUR/USD
The EUR/USD pair initially tried to rally during the day on Monday, but found the area near 1.0950 to be a little bit too rich for buyers, and we turned right back around and fell below the 1.09 handle. Because of this, I feel that we are heading to the next major support area, which is the 1.08 level. With that, I feel that short-term traders will continue to pushes market lower, and that short-term rallies will be selling opportunities. Ultimately, this is a market that looks very bearish for the short-term. Whether or not we can get below the 1.08 level is a completely different question, and one that I can’t answer at this point.
Rallies will continue to find quite a bit of resistance, especially considering the fact that we recently broke the back of 3 hammers. That’s a very negative sign, and as a result I think the sellers are in control, at least for the time being.
GBP/USD
The GBP/USD pair went back and forth during the course of the day on Monday and ended up showing just a slight gain by the time it was all said and done. Ultimately though, I believe that the real resistance is somewhere near the 1.40 level above, which was once a massive support level. Because of this, I feel that it is only a matter of time before the sellers get involved when we rally on a short-term chart, so therefore I’m looking for short-term exhaustion to get involved in this market and start buying the US dollar.
When you look at the US Dollar Index, you can see that it looks as if we are going to go higher. That is a general reflection of the US dollar itself, so I think that we will continue to see strength to the downside in this marketplace, especially considering the fact that there are a lot of concerns about London leaving the European Union.
