EUR/USD
The EUR/USD pair has initially fallen to start out the week on Monday, but also has found plenty of support at lower levels, especially as we approached the 1.15 level underneath. That’s an area that I believe is the bottom of the larger consolidation area, which extends to the 1.1850 level above. With that being the case, I think that we are going to see value hunters coming back into the market, unless we do break down below the 1.15 handle, which would be extraordinarily negative. A breakdown below that level could open the door to the 1.13 level next. I think that this time of year is probably prone to be a little less aggressive, so it would not surprise me at all if we continue to go back and forth in this range.
GBP/USD
The British pound has broken down during the day on Monday, the kick off the week with softness. The 1.29 level underneath offers support though, as it is the bottom of the zone that has lifted this market in the past. I think if we break down below the 1.29 level, the market then breaks down significantly, perhaps down to the 1.2750 level. The alternate scenario is that we turn around and break above the 1.30 level, reaching towards the 1.31 level eventually. I think that we are starting to see value hunters coming back into this market place, but quite frankly you need to be very cautious about your position size. I think that short-term traders will be looking for value, just as long-term traders will. However, if we break down below the 1.29 level, the market could go much lower, and could bring in fresh new selling. There is still a lot of noise out there when it comes to the Brexit, so keep that in mind.
