The EUR/USD pair fell during the Friday session as the markets softened before the weekend. The action was bearish but did in fact find a bit of support at the 1.25 level. The area looks to be an important point in this currency pair that will determine the future couple of weeks in this market. This pair has been without a doubt one of the more perplexing ones over the last year or so, and it looks like we are going to continue that confusion.
When you look at this daily chart, it shows that there was support at 1.25 at the end of the Friday session and that buyers were stepping back in at this point in time. However, at the end of the Thursday session we saw a shooting star that did in fact trigger sell orders based upon Friday's action. On top of that, you cannot deny the fact that the pair failed to get above the 1.25 level convincingly. Also, you have to look at the fact that perhaps the pair is just a bit overbought over the last few sessions.
Up trending channel
It appears that the currency pair has been in an up trending channel since the end of July, and it seems that we are near the top of it. This coincides with a massive amount of noise from previous trading all the way up to the 1.27 level. It is because of this, and all of the various headline risks coming out of Europe that I do not like buying the Euro.
Quite frankly, this pair could continue much higher. But to be honest I look forward easy trades, ones that I can get involved in and simply walk away from the computer terminal with ease. With the way that the situation in Europe has carried on for so long, it just isn't easy to be long for the Euro.
Based upon the recent action, I am more than willing to start selling this pair if we can break below the lows from Friday. This would be a continuation of the bearish pressure, and as such would show a continuation of the overall trend. I do admit however, that if we get above the 1.27 level on a daily close that I would have to consider buying at that point in time as the momentum of the trend will have certainly changed.