By: DailyForex.com
The EUR/USD pair rose during the session on Wednesday in order to break above the 1.30 level again. However, as it has in the past, the 1.30 level offered a significant amount of resistance. The resolve at the end of the day was a shooting star at the 1.30 handle. Because of this, it looks like this market is starting to weaken again, and it has caught my attention.
However, it cannot be missed that there is an uptrend line at the moment that has been pushing this pair sluggishly higher. With that in mind, it looks like somewhere around the 1.29 level we would have a break of support. This could lead to a significant run lower, and it really wouldn't take much for this to happen.
We have several different catalysts that could come about. Obviously, the jobs number on Friday coming out of the United States would be one of these catalysts. Also, there is the potential for negative headlines out of the European Union, which continues to struggle with the debt issues that everybody is well aware of at this point.
Another potential catalyst for this pair would be the US presidential elections. It is believed that if Gov. Romney ends up winning the election, this would be a pro dollar event, which should send this pair down. The main reason is that he has stated that he is going to get rid of Ben Bernanke, who of course has made it his sole mission in life to destroy the greenback.
No Matter What, This Pair Will Remain Messy
Regardless what happens, it looks to me like this pair will continue to be messy for the foreseeable future. This is probably because the markets have been giving the Europeans much more slack than they deserve, and now there's all kinds of uncertainty in the United States. With the Federal Reserve continuing to print currency, it does give the Europeans a bit of a reprieve from the massive selloff that the Euro so desperately deserves. With this in mind, I am only going to sell this pair as a see a ton of noise between 1.30 and 1.35, and don't feel the need to fight this resistance. However, I need to see that 1.29 level broken in order to start selling.