EUR/USD
The EUR/USD pair went back and forth during the course of the session on Monday, ultimately settling on a slightly positive candle. The 1.12 level above is massively resistive, and as a result we did pullback from there. I think that we are going to struggle to go higher, but at this point in time I am also willing to admit that the most recent low of course is higher. With this, it’s likely that the market is trying to break out, but it’s not until we close above the 1.12 level on the daily chart that I’m willing to perhaps by this market and aim for the 1.1350 level. On the other hand, it’s possible that we could break down from here and a move below the bottom of the range during the course of the session on Monday, and this would of course have us selling as the market should reach down to the 1.1050 level.
GBP/USD
The British pound initially trying to rally during the course of the session here on Monday, but turned right back around to form a shooting star. The shooting star at the bottom of the downtrend typically means that we are starting to build up real negative pressure, and then eventually we will continue to go much lower. If we can go down below the 1.28 level on a daily close, I believe that the market will then reach down to the 1.25 level given enough time. Any rally at this point in time that show signs of exhaustion should be a nice selling opportunity as well, as the British pound is being pummeled for the British leaving the European Union. Given enough time, this market will find support but I don’t think that we are going to find it a time soon. I don’t necessarily expect any type of meltdown from this point, but I do think we need to go lower before we find real buying opportunities. Because of this, I am “sell only.”
