EUR/USD
The EUR/USD pair fell initially during the day on Monday, but turned around to slam into the 1.10 level. This level offered enough resistance to keep the market down, so at this point in time I am stepping on the sidelines and waiting to find a resistant candle on a short-term chart that I can continue to sell. I believe that the Euro will continue to struggle overall, as there are a lot of concerns in the European Union, and of course the US dollar continues to offer a bit of a safety bid.
I also believe that the previous resistance barrier at the 1.12 level is essentially the absolute “ceiling” in this market right now and would consider a move above there as a potential trend change. In the meantime, I think that all the noise between here and that level will continue to offer selling opportunities on exhaustive candles after short-term rallies.
GBP/USD
The British pound of course continues to be a focus of a lot of the Forex world at the moment, but quite frankly on Monday it did very little. Because of this, I think that we are simply going to sit still for a while. I would love to see some type of rally that I can start selling above, as I think there’s more than enough resistance to keep the market to the downside. I believe that the 1.35 level above is the “ceiling” in this market, and that the gap above there should of course continue to push the market lower. I have a difficult time selling this market, at least this point in time as there seems to be quite a bit of support at the 1.30 handle, extending all the way down to the 1.28 level. At this point in time, it’s difficult to imagine that were going to have any type of momentum build up initially, but eventually we will grinder way to the downside, perhaps reaching towards the 1.25 handle.
