The EUR/USD pair fell hard during the session on Thursday, but as you can see we are still above the 1.32 handle. This is the area that I said had to be broke down in order for me to start shorting, and you will notice that we did get a little bit of support at the end of the day. That being the case, it's still a market that's off-limits for me at the moment. However, I do think that there is a possibility we break down, but I can guarantee that the real driving factor will eventually be the Federal Reserve and what they do about quantitative easing.
A lot of what's going on at the moment has to do with the Middle East and people being nervous. After all, the US dollar gains in these types of situations, so I think the reasoning behind the move lower is probably going to be a bit too fickle for my liking. However, if we get that close below the 1.32 handle, I would have to go ahead and start shorting simply because the risk to reward ratio is too good.
1.28?
If we get below the 1.32 level, I can make a serious case for getting as low as 1.28 before the move is all said and done. However, I still believe that we will more than likely see some type of supportive action in this general vicinity, so I am going to wait until we get that daily close simply because I think a head fake or two may be in the cards during the day.
If we do find support here though, I think there is a nice short-term buying opportunity, perhaps up to the 1.34 area. We are at the end of summer, and of course most of the larger players are simply not in the marketplace right now, and as a result markets typically don't behave very well at times. However, to think that there some type of major moves starting right now it's probably asking a bit out of the market in late August, but we are getting close to the time when the liquidity comes back into the marketplace and we make that significant move.
