EUR/USD
The EUR/USD pair rallied during the trading session on Monday, as we came back from the weekend with a bit of a sigh of relief after the situation in Syria doesn’t seem to be escalating, and it also looks likely that the rhetoric between the United States and China isn’t escalating either. Because of this, it looks as if we are trying to rally a bit. I think that the 1.25 level above is a significant barrier, but if we can break above there I think that the market would then go to the 1.32 level, based upon the breaking of the top of a bullish flag on the weekly chart. I believe in buying dips, and that the 1.22 level will offer a bit of a support barrier. That being said, it’s likely that we are going to be stuck in consolidation in general.
GBP/USD
The British pound broke out to the upside during the trading session, clearing the 1.43 level. It looks as if we are ready to continue going higher, especially considering that we broke above the top of the shooting star from the Friday session. This is a very bullish sign, and I think that pullbacks will be thought of as buying opportunities. Based upon longer-term charts, I believe that we will go looking towards the 1.45 level above, which is a large, round, psychologically significant number, and of course has been structural resistance. If we can break above there, the market should continue to go to the 1.4750 level. I think that this market is supported all the way down to at least the 1.40 level, but I would be a bit surprised if we went that low. In general, I believe the pullbacks offer value.
