EUR/USD
The EUR/USD pair broke down at the open and continued to drop lower, as the 1.08 level has been broken down from here, and I think we’re going to reach down to the 1.05 level below as it is the next major support level. When I look at the longer-term charts, I can see that we have bounced off of that level several times. Any short-term rallies should be an exhaustive candle just waiting to happen that I can start selling, taking advantage of “value” in the US dollar. I have no interest in buying the Euro, as this market has completely falling apart, but I do recognize that a bounce should be coming fairly soon because of the rapid descent of the value. We have fallen so quickly that it’s very likely that we will have to bounce and collect a little bit more in the way of selling pressure.
GBP/USD
The British pound fell as well, reaching below the 1.25 handle. The market has been grinding higher over the longer term, but at this point I think that it’s a very difficult market to be involved in because there is so much noise and quite frankly comfort around the 1.25 handle as well. If we can break above the top of the shooting star from the Friday session, the market will then reach towards the 1.2850 level above which has previously been supportive, and should now be resistive. On the other hand, if we break down below the 1.23 level below it could be a nice selling opportunity as we reach towards the 1.22 handle, and then perhaps the 1.20 level underneath which is the “floor” in this market.
If we break down below there, the market should then reach towards the 1.15 handle which is a massive supportive level on longer-term charts. At this point in time though, it’s likely that the selling will continue over the longer term.
