EUR/USD
The EUR/USD pair broke higher during the day on Monday, as the 1.05 level continues offer quite a bit of support just below. Bouncing from there is a bullish sign, lease for the short-term, but I don’t think that there is any real argument for buying the Euro at the moment, especially against the US dollar. I think that the 1.0750 level above should be a selling opportunity, and as soon as I see an exhaustive candle I would be more than willing to get short. A break down below the 1.05 level sends this market looking for parity, but until then I am just looking for selling opportunities on the shorter-term charts as the Euro drops of it.
GBP/USD
The British pound rallied during the day on Monday, bouncing off of the 1.2550 level. A break above there is sending the market looking for the 1.27 level which was previously the resistance barrier and of course the 50% Fibonacci retracement level. Ultimately, any signs of exhaustion would be a nice selling opportunity but even if we break above there I think that the absolute ceiling in the market is at the 1.2850 level. An exhaustive candle in that area should be a nice longer-term selling opportunity, but if we can break down below the bottom of the uptrend line, that would be reason enough to short and I would be especially aggressive to the downside if we get below the 1.25 handle.
The 1.25 level been broken to the downside should send this market towards the 1.20 level below. The British pound should continue to have a lot of struggles as the outlook of the exit from the European Union still remains a bit of a mystery. Ultimately, this is a market that will eventually start favoring the US dollar sooner rather than later, due to not only interest-rate hikes but potential statement coming out of the Federal Reserve.
