The Euro broke higher during the trading session on Monday, reaching towards the crucial 1.12 resistance barrier. This is an area that should cause quite a bit of resistance, or at the very least quite a bit of interest, as it was such a massive support level. At this point, it’s very likely that we will continue to find a bit of selling pressure here, so at the first signs of exhaustion I would be a seller. If we can break above the 1.1250 level, then we could see a little bit of follow-through to the upside. Overall though, after seeing this significant break down it’s very likely that people will be looking to take advantage of what has been an obvious downtrend over the last several weeks. If we were to break down below the bottom, then we will be reaching towards the 1.10 level underneath.
The British pound went back and forth during the trading session, ultimately settling on a slight gain. There is a significant amount of resistance built into the 1.30 level, an area that was previous support. Now that we have broken down through the descending triangle, it’s very likely that we will continue to grind lower and why wouldn’t we? We have a lot of questions when it comes to the Brexit and what comes next. As long as that’s going to be the case it makes sense that the British pound would fall. I’m not necessarily advocating that we are going to roll over and fall apart, just that there will continue to be more faith in the greenback than the Pound, but of course I have to keep an open mind. If we were to break above the 1.31 level, then I would be a buyer.