The EUR/USD pair fell during the session on Friday again, breaking the bottom of the neutral candle that we had printed on Thursday. Because of this, it is obvious this pair has significant weakness in it, and of course the lack of economic performance out of the European region isn't going to help. What I found interesting is that the 1.28 level has acted as support yet again. If you look at this chart on the longer-term timeframe, you can see that the 1.28 level has acted as support several times in the past. It's because of this that I think we are at a significant point in the direction of this pair.
If we can get below the 1.27 level, I think that that support level has been completely smashed, and the market heads down towards the 1.25 level at fairly quick turn of events. The buying of this pair is a bit difficult though, as you can see that there are plenty of forces is working against this market at the moment. The last month has been particularly bad for the Euro, it seems like every time we think the European crisis is completely over with, another headline comes down to stoke fears again.
Bounces could be sold
If the 1.28 level offers a bounce at this point time, I cannot help but think that this will simply end up being a selling opportunity. The market has been decidedly negative of the Euro, and I feel that this will continue because the European Union simply has far too many issues going on at once. After all, the market does not like uncertainty, and uncertainty is essentially what you get with the EU.
The recent interest rate cut of course takes some of the luster off of the Euro anyways, and the fact that there are hands that the United States may possibly taper off of interest rate reduction measures later this year will add fuel to the fire of a stronger US dollar. On top of that, the American economy is outperforming almost all others at the moment.
