EUR/USD
The EUR rallied again during the session on Monday and even hit a fresh, new high. We gapped higher at the open, filled the gap at the 1.1920 level, and then came very close to the 1.20 level. I think that level will cause a significant amount of resistance, but it is probably only going to be a matter of time before the buyers come in and push that market higher. Because of this, I like buying short-term pullbacks on short-term charts. I have no interest in selling the market, and I believe that we will eventually test the 1.20 level. I also believe that the recent breakout that we have seen from the almost three-year consolidation area should send this market looking as high as 1.25 over the longer term. That’s not to say there will be pullbacks, but those pullbacks should offer plenty of value the traders will want to take advantage of. Ultimately, this is a market that continues to look healthy.
GBP/USD
The British pound gapped higher at the open on Monday, but then fell immediately. We ended up filling the gap, thereby finding more buyers. We are clear on the 1.29 level, and I think that the short-term buying will continue. This has less to do with the British pound than it does the US dollar, and I think that the market will probably go looking towards the 1.30 level. It’s at that level that I suspect that the heavy selling pressure will return. After all, there are a lot of concerns when it comes to the British pound and even though the US dollars getting hammered, but does not change the situation of the United Kingdom leaving the EU, and all the concerns around that.
