EUR/USD fell during the session on Thursday, as we continue to pick away at the 1.23 level. The area is acting as support currently, and as such we see the real battle lines being drawn in this general vicinity. It does make sense, as it was the site of the recent breakout to the upside.
However, it should be noted that we simply cannot keep any serious traction to the upside. Ultimately, any of the readers on this site should know that I am very bearish of the Euro, and not much has come along to change that opinion.
Until the Europeans finally get their act together, it appears to me that any rally in the Euro is simply an invitation to sell at higher prices. Currently, I see a lot of noise above, and would be very reluctant to go along of this pair even though I can make an argument for a short-term move higher.
1.25 is the epicenter
From what I can tell, the 1.25 level is the epicenter of a massive resistance area going all the way up to the 1.27 level. Because of this, I think that we will eventually get a nice selling opportunity in this market, if we haven't already. After all, you should see that there are two hammers recently that have been broken down below, and the only thing that's keeping us up is the 1.23 handle.
If we can break below the Thursday lows, I will be selling this pair again as I think it will make a run back towards the 1.20 level. However, if we rally I will be looking for weakness to sell and am especially interested in the 1.25 area. If I get some type of weak candle in that general vicinity, I will not hesitate to sell this pair as I believe in the original analysis that I made a few weeks ago that we were going to 1.15 before it's all said and done. As for buying the euro, I simply won't do it as there far too many issues in that area right now.
