EUR/USD
The EUR/USD pair initially fell during the course of the day on Monday, but turned around to form a bit of a hammer. However, we are just below a previous uptrend line, and as a result it looks as if the market is going to run into a bit of resistance. With this, I’m waiting to see some type of exhaustive candle that I can start selling, but at this point in time obviously do not have it. A break down below the bottom of the hammer would also be a selling opportunity, and I would not hesitate to take it. At this point in time, and have no real interest in buying the Euro, simply because there so much uncertainty in the European Union currently.
GBP/USD
The GBP/USD pair did almost nothing during the course of them Monday as well, as we continue to meander around the 1.33 level. At this point in time, I see a significant amount of resistance at the 1.35 handle, and the 1.32 level below should be supportive. With this, I believe that we continue to bang around in this general vicinity and as we are in the middle of the range, it makes quite a bit of sense that we could find ourselves just a bit confused. I prefer to sell rallies that show signs of exhaustion, as I do believe that the value the British pound continues to sink over the longer term.
Alternately, you have to keep in mind that the US dollar will be looked at as a bit of a safety play, and I believe that it will continue to favor the downside in this pair because of that dynamic. Given enough time, I do think that we try to reach the 1.30 level below as well though. Ultimately, this is a negative pair.
