EUR/USD
The Euro bounced during the day after initially falling on Monday. With this being the case, it looks like we are starting to find quite a bit of volatility, and with that, it’s likely that we will continue to see a lot of back and forth movement. Ultimately, if we break higher, we will find sellers after exhaustive moves, just as we would find sellers after a break down below the bottom of the candle for the session on Monday. Either way, there’s no point in believing that the markets going to be easy to trade, but it looks like short-term traders will continue to be attracted to the EUR/USD pair as we continue the extreme amount of choppiness.
GBP/USD
The British pound did fall during the course of the session on Monday, and with that being the case, it looks as if we are going to reach down to the 1.30 level where we see quite a bit of support. I also think that there is quite a bit of support down at the 1.2850 level, which is the bottom of the market. If we break down below there, we will then reach down to the 1.25 handle given enough time. A rally at this point in time will more than likely attract sellers, and therefore I think that an exhaustive candle is reason enough to start shorting as well. The 1.35 level above is the absolute ceiling in this market, as there is not only a large round number there, but also a massive gap in that general vicinity. Another thing that you need to look at in this market is that the highs have gotten lower each time we bounce, and therefore that tells me that the selling pressure is starting to pick up. Sooner or later, the volume pick some after the summer break, and we should then break down.
