EUR/USD
The EUR/USD pair did rally during the day on Monday, breaking above the top of the hammer from the Friday session, which of course is a buy signal. Ultimately, I believe that pullbacks should continue to offer buying opportunities, as the 1.17 level looks to be very supportive. If we can break down below the 1.17 level, the market should then go down to the 1.15 level underneath which was the scene of a major breakout. That breakout of course is a very bullish sign, and measured for a move to the 1.25 handle above which is my longer-term target. I recognize that the 1.20 level above is massively resistive, and extends to the 1.21 handle. I think these pullbacks continue to offer buying opportunities, so therefore I have no interest in shorting. Ultimately, this is a bullish market, even though we have seen some negativity over the last couple of weeks.
GBP/USD
The British pound broke above the top of the hammer from the Friday session during Monday, finally showing signs of strength again. The 1.30 level underneath should continue to be supportive, as it is a large, round, psychologically significant number. Ultimately, if we can break above the top of the highs for the session on Monday, then the market has more of a chance to continue to rally from here. Ultimately, I believe that if we can break above the top of the candle the market should go looking towards the 1.33 handle above. After that, I suspect that the 1.3650 level will be the next target as it was the scene of massive resistance as of late.
Alternately, if we break down below the 1.30 level underneath, then the market should go to the 1.2750 level which is support below there. Either way, I think you will see quite a bit of volatility in this pair.
