EUR/USD
The EUR/USD pair initially fell during the trading session on Monday, but turned around to show signs of life again. I believe that there is a significant amount of resistance near the 1.17 level though, so it’s difficult to get overly excited until we can close well above that level on the daily chart. This was the neckline of a head and shoulders pattern, and so far, we have not been able to violate that level, so I think we are currently treading water. With this in mind, I am waiting for a daily close before I make any type of decision in this pair, and will not be placing a trade until another 24 hours plays itself out. As things stand, the head and shoulders is still in effect, and it should have this market looking for the 1.13 level below.
GBP/USD
The British pound had a rough day as there are fractures in the British government, as Teresa May is starting to lose confidence of various MPs. However, there is a massive amount of support underneath, as the 1.30 level coincides not only with horizontal support, but also an uptrend line. I believe that the market continues to bounce around sideways in general, and because of this it is still stuck in range bound trading. I think that we will probably try to get towards the 1.3250 level above, which extends to the 1.3333 level IV resistance. If we can break above there, then the market will more than likely go looking towards the 1.35 handle. A breakdown below the 1.30 level would be very negative, but considering how much pushback we had seen during the trading session on Monday, I don’t think we are going anywhere anytime soon. In general, the Forex markets look very quiet.
