EUR/USD
The EUR/USD pair rose slightly during the course of the day on Monday, but you have to keep in mind that there are would be a lack of liquidity due to the fact that the Americans were away celebrating Memorial Day. Ultimately, I think that there is a significant amount of resistance at the 1.1250 level. That’s an area where we had seen quite a bit of choppiness previously, and therefore it will more than likely offer that resistance. Any type of exhaustive candle in that area would be an excellent opportunity to sell as far as I can see. I think that the market will eventually try to reach down towards the 1.10 level, which is an area that has of course been very interesting for traders over the last several months.
GBP/USD
The British pound initially fell during the course of the day on Monday, but found enough support to turn things back around to form a bit of a hammer. The hammer suggests that we are going to go higher, and I think that is possible but I don’t believe that we will be a lot of break above the 1.48 level anytime soon. I think we will have to go back several times in order to build up enough momentum to finally make that move. Once we do though, the market should eventually reach towards the 1.50 level.
Even if we did break down from here, there is a massive amount of support at the 1.45 level. That’s an area that has been important several times in the past, and there’s no reason to think that it won’t be going into the future. Ultimately, I do believe that the British pound goes higher, but we have a lot of things that we have to worry about when it comes to the British pound, not the least of which is the fact that the United Kingdom is voting on whether or not to stay in the European Union soon.
