The EUR/USD pair fell during the session on Thursday, as the consolidation continued. Looking at this chart, it's easy to see that the 1.30 level will more than likely offer significant support, as it did back in January. Because of this, I am a bit leery of shorting at this area, but I do recognize the fact that rallies will continue to offer excellent selling opportunities. This is especially true if we can bounce back to the 1.3250 level.
A move below the 1.30 level opens up to the 1.25 level over time in my opinion. As long as there are problems with the Italian Parliament, and a lack of a coalition to govern that country, there is going to be a bit of a wait upon the Euro. As long as that's the case, traders will more than likely be much more enthusiastic about buying the US dollar then the common currency, and as a result this pair will continue to drift lower.
That being said, I believe that a breakdown isn't quite ready to happen yet, simply because we have fallen so far, so fast. Certainly, the trend is to the downside at this point time, and a move below 1.30 is significant, but we have to keep in mind that there are many out there who will buy this pair based upon risk appetite being good, and nothing else.
1.30
Previously, the 1.30 level has been massive resistance as well as support. Looking at this chart, you can see it on the longer-term perspectives, and we also have to keep in mind that the market has a natural proclivity to buy the Euro, so we will more than likely see massive and volatile moves. With this in mind, we have to step back and let the market come to the areas that we mark ahead of time. I believe that the pair will break below the 1.30 level, and I also believe that it will be a significant selling opportunity. However, I will be waiting for daily close in order to do so.
