EUR/USD
The Euro rallied significantly during the day as Mario Draghi spoke, crashing into the 1.18 level. However, we gave back the gains to end up forming a bit of a shooting star. This is an area that we’ve seen a lot of resistance at previously, so pull back from here is not a huge surprise at all. I think that the 1.17 level will offer the first initial support, and then possibly below there at the 1.1650 level. If we break down below that level, I think at that point we will probably then go down towards the 1.15 level below which has been massive support more than once. At this point, the question is whether we can break out, or are we simply going to consolidate yet again? A break above the top of the candle stick would be a very bullish sign though and could send this market towards 1.20 level.
GBP/USD
The British pound has rallied significantly during the trading session but gave back most of the gains as well. By doing so, we formed a less than convincing candle stick, and if we break down below the lows of the Friday session, that could send in fresh selling. I think the 1.30 level will offer support though, and of course this is all headline driven when it comes to the Brexit. At this point, the market is trading purely on a motion, but we did make a serious trend line break previously. The Friday candle doesn’t exactly inspire confidence though, so I am willing to buy the British pound, but I’m willing to do so only in small increments and add as it works out in my favor.
