The EUR/USD pair has gone back and forth during trading on Monday, as we continue to see very choppy trading action. I believe that the 50-day exponential moving average, pictured on the chart in red, should be a buying opportunity just waiting to happen. The 1.25 level above is going to be very resistive, as it has a significant amount of importance tied to it. If we can make a fresh, new high, that’s obviously a very bullish sign. Otherwise, we pull back from here I would anticipate seen quite a bit of support at not only the 1.21 handle, but also the uptrend line that has intersected that level. In general, I believe that there are plenty of buyers just waiting to jump into this market, and therefore pullbacks that show signs of support are buying opportunities, just as a break above the top of the candlestick for the Monday session should be bullish also.
The British pound has been very noisy as well, testing the 1.40 level for both support and resistance. If we can break above the top of the candlestick on the Monday session, I think that would be an extraordinarily strong signal, as the 50 EMA is just below, and should offer dynamic support. If we can break above the top of the candle, that shows resistance giving way, perhaps allowing the British pound to reach towards the 1.43 level above, and a break above there should send the market much higher. The next target would be the 1.45 level above, and I think that it may take several attempts to finally break above that level. In the meantime, I see a significant uptrend line underneath that should continue to lift this market going forward. I believe the US dollar continues to suffer.