EUR/USD
The Euro had a slightly positive session during the day on Monday to start out the week, as we continue to bang around the 1.17 level. This market continues to be choppy to say the least, and we are approaching the 50 day EMA. If we can break above there, then I think we will go looking towards the top of the overall consolidation area, the 1.1850 level. This is an area that’s going to be very difficult to break above. I think that the sellers will come in and start pressing the issue in that area, but if we were able to break above there, we could go looking towards 1.20 level after that. In the short term, it looks as if we are going to at least attempt to get to that area.
GBP/USD
The British pound initially rallied during the day but found enough noise at the 1.33 level to turn around of form a negative looking candle. The 50 EMA is just above that level, and you can see that I have a downtrend line drawn on the chart. I think that the British pound will continue to suggest negativity overall, mainly because we have the noise coming out of the political theater in the United Kingdom. I believe that the market should continue to sell rallies, but if we were to break above the 50 day EMA, I think we could then go looking towards the 1.35 level above, an area that should see a lot of supply as well. In fact, we are free to go significantly higher until we break above the 1.36 level. I think there is so much in the way of noise out there that it will be difficult to hold onto the British pound longer-term.
