EUR/USD
The EUR had a volatile session on Monday, as we have been a bit overbought as of late. Ultimately, I think that pullbacks will be buying opportunities, as we have just broken up above the consolidation area that the market has been so well contained. I believe that the breakout sends this market to much higher levels, perhaps reaching towards the 1.1850 level above which is the top of the next consolidation area. Now that we have broken out of that area, the top of it, the 1.15 level, should now act as a bit of a floor in this market, and I believe that we will continue to see bullish pressure after this move. If we were to break below the 1.14 handle, that would be catastrophic for the EUR.
GBP/USD
The British pound rallied during the session on Monday, breaking the top of the shooting star from Friday. By doing so, that shows a significant amount of strength and I believe that the market should continue to go much higher. Longer-term, I still believe that the market is going to reach towards the 1.3450 level above, but that is going to take quite a bit of time to get there. I think that pullbacks continue to offer buying opportunities, as the market continues to stair step its way higher. I recognize that there are a lot of concerns as far as headlines are concerned with the British pound, but at the end of the day I don’t think there’s too much to worry about, and I believe that this has more to do with the US dollar than the British pound, and we know that the US dollar has come under severe pressure. Alternately, if we break down below the 1.29 level, then it becomes very bearish.
