EUR/USD had a strong session on Wednesday, to fill the gap from the weekend open. The candle does look fairly strong, and I do have the mid-although I am very bearish of the Euro in general, this does make me believe that selling at this point will be a little bit difficult.
Just above, we can see a consolidative area that should provide a good range from which to sell this market. I will of course have to see the correct type of weak candle, and as such I will be willing to be very patient in order to sell this currency pair. I suspect that the 1.22 and 1.23 area as both will provide plenty resistance in order to get short again.
Some of the happiness from the Euro side during the day was based upon a few errant comments by ECB members about the possibility of giving the ESM bank status. This allows the ECB to buy debt in a backdoor kind of way, which of course is a simple accounting gimmick. However, this is exactly the type of news that things like to hear, as much of the banking system has simply become a matter of shuffling numbers back and forth.
Needless to say, the real economy has nothing to do with these kinds of gimmicks and this is why I think any rally will be short-lived the best. There's also talk of the Federal Reserve easing next week, and if they do that could also give a bid to the Euro. However, that will also be short lived as the simulative effect of these types of moves becomes less and less as time goes by.
And the beat goes on...
The area just above had been consolidative, and even very supportive recently. Is because of this that I feel we are going to try to break higher, but it will only fail in the end. With this in mind, and the entire massive amount of headline risks out there for the Euro in general, I am more than willing to sell the first sign of weakness I see.
