EUR/USD
The EUR/USD pair was very quiet on Monday, gaining very slightly after the significant selloff on Friday. Quite frankly, this market needs to pull back so I don’t have any interest in buying these elevated levels. I need to see some type of pullback that offers value in the EUR that I can take advantage of, and would love to see a retest of the 1.15 level underneath for support. This market is overextended, so I think that it’s susceptible to significant falls, but I also recognize that shorting isn’t going to be easy to do. Because of this, I’m choosing to sit on the sidelines and patiently wait value to present itself that I can take advantage of. Otherwise, I will have to be on the sidelines.
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GBP/USD
The British pound was interesting during Monday, as we tested the 1.30 level. We ended up forming a somewhat supportive looking doji, and this suggests to me that there is a certain amount of support at the psychologically important 1.30 level. If we break above the top of the range for the session on Monday, I believe that the market will go looking for higher levels, with the most obvious one being the 1.32 handle above. If we break down below the 1.30 level, I think that opens the door for move down to the 1.2850 handle underneath. A breakdown below there would be very negative and send this market much lower. I still believe that a lot of traders are out there looking for the 1.3450 level, but obviously there is going to be a lot of headline risk out there, and of course noise just above to keep that from happening too quickly. This market will continue to be very noisy.
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