EUR/USD fell again during the Thursday session as one would expect, but the fact is that there was a bounce towards the closing and this suggests that we may see a bit of an awakening. The 1.22 level has acted as support for the time being, and I am welcoming this as an opportunity to not only take profits, but to also get ready to load up on the sell orders again.
The candle from the session of course is negative, but the fact that we manage to bounce off and this it at basically the 1.22 level suggests to me that the market has finally started to run out of people to sell this currency, and the oversold bounce should be coming. This makes sense as it will be a Friday session, and a lot of traders don't like carrying positions over the weekend.
However, I feel that this pair really only has one direction and that's down. This is no secret if you been reading my analysis, and as a result you know that I'm looking to sell this currency over and over again. Looking forward, I see any bounce running into serious trouble at the 1.24 level as it is the beginning of a thick resistance level running to the 1.25 handle.
Still aiming for much lower levels
Let us not forget that there was a bearish flag that got broken to the downside right around the 1.25 level. The pole on the flag suggested a move lower of 1000 pips, which would send this currency pair down to the 1.15 level. I know this sounds a bit extreme, but let us not get too hung up on numbers as it is just below the area that the market open up at Euro was created.
I still believe that we will find this level, although it may not happen right away. I suspect that it will be more of a slow grind downwards, and as such I am always looking for an opportunity to sell this currency. On this bounce I am selling any weakness that I find on the four-hour chart or above time frames, or would sell if we break the bottom of this hammer like candle from the Thursday session as it would show an acceleration of weakness. I believe that the 1.20 level will cause a reaction in the bounce, so I'm suspect that I will be giving very similar analysis when we get there as well.