EUR/USD
The Euro initially tried to rally during the day on Monday to kick off the week, showing signs of support again at the 1.15 handle. We pulled back from there to reach towards the 1.1450 level, which of course is a major support. Ultimately, I think that the market will probably go higher so it doesn’t surprise me that we have bounced a little bit towards the end of the day. This is the bottom of a major consolidation area, and I think at this point we could get a bit of a relief rally. However, if we break down below the lows of Friday, then I think the market could unwind a little bit. That being the case, it’s likely that the market could drop to the 1.1350 level. However, if we rally from here I could see this market going to the 1.16 handle, and then eventually the 1.18 level after that. I think we are getting to a point where value hunters are starting to come back into the marketplace, so I am willing to take a small position to the upside.
GBP/USD
The British pound has seen a lot of negativity during trading on Monday, breaking through the 1.30 level as we continue to have political upheaval in the United Kingdom. Ultimately though, I think that we are starting to see some stabilization towards the end of the day and if we can break above the 1.30 level, the buyers will push this market towards the 1.3250 level. The downtrend line as you can see has been broken to the upside and then we continue to go back and forth. That is typical for a trend change, so I still believe that it’s only a matter time before the buyers come in and push higher. However, I would be very small in my position initially, only adding once things get in our favor.
