EUR/USD
The EUR/USD pair initially tried to rally but turned around to form a fairly negative looking candle as it was a shooting star, and it sits just below the 1.12 handle. If we can break down below the bottom of the candle during the day, I think the market reaches towards the 1.11 handle, and then perhaps the 1.10 level underneath. Ultimately, if we find support below, I think the longer-term uptrend continues but we may need to pull back in order to build up enough momentum to go higher. I believe that longer-term we go to the 1.15 handle, but we are bit overextended at the moment and pullbacks should be buying opportunities. A breakdown below the 1.10 level is negative, and probably sends the market towards the 1.0850 level after that.
GBP/USD
The British pound bounced during the day on Monday, testing the 1.2825 level underneath. The 1.2750 level underneath that is the absolute floor in this market as far as I can see, as it was so massively supportive in the past. I believe this pullback is all but over, because this was in reaction to election polls that suggested that Teresa May might be in a bit of trouble. Ultimately, we got more spread between the 2 parties on the news wires after several polls came out over the weekend. So, this looks as if the market is ready to continue the bullish pressure, and at this point I think it’s a nice buying opportunity. That’s not to say that it won’t be difficult to break higher, but I certainly have no interest whatsoever in selling. Ultimately, if the market breaks above the 1.3050 level, we should continue to go to the 1.3450 level above which is the top of the longer-term consolidation area that it looks like we are trying to break into now.
