EUR/USD
The Euro fell hard during the trading session on Monday, reaching towards the 1.16 level, and formed a fresh, new low. The market continues to react to Italian bonds and of course uncertainty involving a new Italian government. However, we are most certainly oversold at this point, so a bounce could be just around the corner. I think that some type of bounce should be thought of as a selling opportunity, and I would do so on the first signs of resistance. I believe that we are going to wipe out the entirety of the move that was the uptrend back from November, which means that we should go to the 1.1550 level. The 1.15 level underneath could be support, as it is a large come around, psychologically significant number. I have no interest in buying this pair, at least not until we form a weekly bullish candle.
GBP/USD
The British pound fell during the trading session on Monday as well, reaching towards the 1.33 level which is a large come around, psychologically significant figure. I think that the market will continue to look at rallies as an opportunity to pick up value in the US dollar, as it has been so bullish as of late. Ultimately, this is a market that I think will continue to reach lower, perhaps down to the 1.30 level after that. We are well below the 200 simple moving average on the daily chart, and of course the previous uptrend line that defined the overall trend. I like selling rallies as they appear, as it gives us an opportunity to pick up value in the greenback in this market as well. I have no interest in buying.
