EUR/USD fell during the Wednesday session as the Euro continues to suffer at the hands of the financial markets. This pair is showing a real "risk off" attitude lately, and as such it should be a surprise that we had a fairly benign attempted to rally in the early hours.
There'll always be a certain amount of traders who believe that the Euro is undervalued, but the truth is that every time a few people have come into supported, the Euro has fallen on them and cost the money. It is through these optics that I look at this market, and as such if you have been reading my writings lately, you know that I refuse the by the Euro at this point in time.
The candle for the session on Wednesday does suggest that perhaps there still bearish pressure at this point in time, but bounce does seem to be coming in several other Euro denominated and "risk on" assets. The last couple of weeks of been brutal for the Euro, so a bounce here shouldn't be a major surprise.
Fade the rallies
The candle for the Wednesday session is interesting as it looks much like a shooting star, or even a bit of a doji. Either way, a break of the bottom of this range would be an extremely bearish signal and have me selling yet again. On a break to the upside however, I think that this will simply provide us with a selling opportunity at higher levels. 1.25 obviously is a major area to overcome in the near future, and if we manage to bounce I would be very interested in selling.
The truth is that as long as there is in a real, permanent, and agreed upon solution in Europe, but simply will not be any sustainable rallies in the Euro. With this being said I am fading all rallies on weak candles and willing to look on the lower time frames in order to do so. Obviously, if we break the bottom of the Wednesday range, I would be short again as well.