EUR/USD
The EUR/USD pair gapped higher during the day on Monday, and reached all the way to the 1.09 handle. However, we pulled back a bed as it looks like the markets ran out of steam. I think that it’s only a matter of time for the buyers return though, so a supportive candle on short-term charts might be a nice buying opportunity. Because of this, I believe that the bullish traders out there will have to be patient so that the market can find enough support underneath in order to go higher. Ultimately, I believe that the market will try to reach towards the 1.10 level above, which is a large, round, psychologically significant number. The 1.0750 level underneath should continue to be massively supportive, so until we break down below there I have no interest in selling.
GBP/USD
The British pound broke higher during the day on Monday, reaching towards the 1.26 handle. That’s an area that could be a significant resistance but if we can break above there it would be very bullish. The fact that we pulled back doesn’t surprise me, and with this being the case it makes quite a bit of sense that we may have to go back and test the 1.25 handle in order to find significant bullish pressure and momentum building action.
Once we do breakout over the 1.26 handle, the next resistance area will be the 1.27 handle. After that, the market should go much higher and reach to the upside. I don’t have any interest in shorting the British pound, although I recognize that the Article 50 been triggered in the next couple of days will cause quite a bit of volatility. Nonetheless, I think that any pull back at that point will only offer buying opportunities based upon value.
