EUR/USD
The EUR/USD pair rallied during the session on Monday, using the 1.06 level as a springboard. The 1.07 level above should be resistive as it has been in the past, so the fact that we pulled back a little bit during the day is not a huge surprise. Because of this, I think we are still consolidating overall so I would not be surprised at all to see a short-term pullback in the market. I also believe that the 1.06 level will be supportive, and until the market can make up its collective mind, we will probably be stuck in a relatively tight range. And impulsive candle will be the signal that I’m looking for to buy or sell this market. Ultimately, I think that volatility is the one thing you can count on.
GBP/USD
The British pound rallied during the day on Monday, reaching towards the 1.26 handle. However, we could not break above there and although this market looks bullish, I think a pullback may be necessary to build up enough momentum to go higher. There is a lot of noise above, but ultimately, I think the inflationary pressures are starting to build up against the British pound, and we should continue to go much higher. With this being the case, I would anticipate that the market should continue to go even higher. I don’t have any interest in selling, and I believe it’s only a matter of time before the buyers return on any pull back.
It is not until we break down below the 1.2350 level that I would consider selling, as the market would more than likely reach towards the 1.21 handle underneath. Having said that, the most recent low has been quite a bit higher than the previous one, which is the very essence of a market turning into an uptrend.
