EUR/USD
The Euro initially fell during trading on Monday but did find enough support underneath to keep the market somewhat afloat. The 1.15 level underneath offers a lot of support, as we have seen several times over the last few months. I think that the market will find buyers on dips, and we will eventually rally back towards the top of the consolidation area, reaching towards the 1.18 level above. That is an area that has been massive resistance more than once, so don’t be surprised at all if we see back-and-forth action going forward. If we do break above the 1.18 level, that obviously opens the door to higher levels, just as a break down below the 1.15 level will be a negative sign and should send this market much lower.
GBP/USD
The British pound had another wild session on Monday, as a Twitter headline came out suggesting that the British were willing to negotiate and perhaps give way on the demand by the European Union for Irish border customs. That was quickly refuted, and you can see exactly what that’s done to the market. This is a very negative looking candlestick, but it’s not until we break down below the 1.30 level that I become somewhat concerned with this market. I recognize it will continue to be very noisy, so therefore it’s going to be very difficult. At this point, I see the 1.3125 level above as resistance, and a break above that level allows the market to continue to the upside. In fact, I could make a bit of an argument for a pennant forming as well. However, if we break down below the previous downtrend line, that could send this market looking towards 1.2750 level.
