EUR/USD
The EUR/USD pair initially broke higher during the course of the session on Monday, but gave back quite a bit of the gains in order to form a likely shooting star. With this being the case, it appears that we are trying to break down but I would be very quick to point out the fact that there is a significant amount of support near the 1.1150 level. I think if we can break below the 1.11 level, it might be an event that could get the sellers involved. This of course should send this market down towards the 1.10 level where I would anticipate even more support. With this being the case, I am a seller on not only the breakdown, but also short-term rallies that show signs of exhaustion as we had happened during the session on Monday.
GBP/USD
The British pound initially tried to rally during the course of the day on Monday, but gave up gains just as the Euro did. However, we not only sell, but we sold off quite a bit more in this market then we did in the Euro. With this being the case, I feel that it’s only matter of time before we finally break down below the 1.30 level again, and then down to the 1.2850 level below. If we can break down below there, the market will more than likely reach down to the 1.25 handle. With this being the case, the market seems to continue to want to punish the British pound for the exit vote coming out above the United Kingdom a few months ago. With this being the case, it’s more than likely going to continue to show quite a bit of negativity.
I have no interest whatsoever in buying this market, because quite frankly the market has quite a bit of selling opportunities ahead of it as every time we rally, the sellers look at it as “value” in the US dollar.
