EUR/USD
The Euro was very noisy during the trading session on Monday as traders went back to work. The 1.15 level has previously been supported, and it should now offer resistance. I think that the market will continue to be negative overall though, especially if the situation in Turkey gets worse. There’s no sign of a getting better longer-term, so I think it’s only a matter of time before we probably reach down to the 1.13 level. That’s an area that should be structurally important, so it’s only a matter of time before we would get a short-term bounce. However, it’s clear that the world is stepping away from risk, and it’s very likely that we will continue to see the US dollar strengthening. However, if we turn around and break above the 1.16 level, that would change everything.
GBP/USD
The British pound has gone back and forth during the trading session on Monday, as we bounced around the 1.2750 level. I believe that this level is crucial, and if we break down to a fresh, new low, then the market probably goes down to the 1.25 handle. If the market bounces from here, I suspect that the 1.30 level will offer a significant amount of resistance as well. Overall, the British pound will continue to see a lot of noise due to the Brexit and of course concerns about the global trade situation of course. The US dollar is a safe haven of course, and that’s exactly how it’s been treated in this situation. Any bounce at this point will more than likely bring in selling at the first signs of trouble, and I do believe at this point we will probably go looking towards 1.25 level eventually.
