EUR/USD
The Euro has gone back and forth during the trading session on Monday, as traders came back from the weekend. We are most certainly at extraordinarily low levels, and it looks as if we are trying to form a hammer again. This tells me that we are likely to continue to fight to the upside, reaching towards the 1.1450 level, extending to the 1.15 handle. Any signs of exhaustion in that area would have me selling this market, as we have seen a lot of bearish pressure. However, if we see the market break above the 1.15 handle, then we should go to the 1.16 level. At this point, I think it’s only a matter of time before the volatility comes back, perhaps expending more energy. This market looks as if it is trying to find a bottom, but that’s not going to be easy. The 1.13 level underneath is supportive as we have seen in the past, so I think we are getting get some value hunters.
GBP/USD
The British pound has been somewhat negative during the day but we are still above the bottom of the hammer that formed on Friday, the 1.20 level, and of course the previous downtrend line that should support this market. I think there’s probably enough support between here and the 1.2750 level to keep the market somewhat afloat, but if we were to break down below that level it’s very likely that the market could break down. Alternately, if that support does hold, we could see the market bounce significantly due to the oversold nature of the British pound. Beyond that, if we get some type of good news coming out of the Brexit negotiation or at least some type of agreement between British lawmakers, that might be reason enough to send the market higher.
