The EUR/USD pair is obviously the focus of Forex traders these days. You simply cannot go to a financial website, forum, or channel without hearing the debt crisis in Europe being mentioned. The fact is that we have been playing around with this situation for three years now, and the remedy is still out of sight. Right now, there simply seems to be one mini crisis after another that pops up, and I find it hard to believe that the pair is as high as it is currently. Someone with a lot of money has been working to keep this pair higher. (I am looking at you, Asian and Middle Eastern central banks.)
The fact that this is Europe we are talking about is probably what is saving the currency at this point. For an exercise in perception, think of all of the problems in the European Union, and imagine the same thing going on in central Africa. This imaginary union would have seen the currency collapse, and the union dissolved by now.
The Euro is living on borrowed time as far as I am concerned, but I cannot condone trading it as such because of the dazzling array of “hopium” fueled rumors that will push this pair up from time to time, even though it doesn’t deserve to be. As a matter of fact, I can only trade this as if it is in a nice and steady decline.
1.26 holds the bulls back
The 1.26 level held firm as resistance on the Wednesday session, and the fact that much of the gains were given back would have me concerned if I were long of this pair. Markets can crumble much longer than you anticipate, so stepping into this pair because it if “oversold” is a sure fire recipe for losses. I have found success in being patient for weakness to sell, and this is still how I wish to trade this market.
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I will sell weak candles near the 1.26 level, and a daily close beneath the lows for Tuesday. I will also consider selling at the start of the Friday session as well, as I believe the buyers are going to be covering before the weekend comes with the Greek elections looming. I am not interested in buying the Euro until we see a break above the 1.30 level on a daily close. And yes, this even includes a favorable result from the Greek elections. After all, that is just the next problem, and hardly the last one.