The EUR/USD pair tried to rally during the course of the day on Wednesday, but struggled at the 1.26 level yet again. By doing so, we ended up forming a massive shooting star which of course is just about perfect in a marketplace that has been bearish for some time. The 1.25 level just below of course is massively supportive, so at this point in time we need to break down below there. However, having said that the truth is that the market has sliced through this level couple different times, so having said that I am still bearish and I think that we will in fact break down. However, I’m using the 1.25 level as a “trigger” to start selling again.
A break below there, and I think that the market will first head to the 1.24 handle, and then possibly lower than that. Ultimately, we would then head to the 1.2050 level, and then possibly even lower than that given enough time. I think that the Euro will continue to suffer against the Dollar over the longer term simply because the two central banks are on such divergent paths.
Continued selling opportunities.
I believe that there will be continued selling opportunities going forward, and as a result I look to sell this market every time we rally, as there should be continued selling pressure. I think that it may be a bit of a bouncy ride lower, but ultimately the path is clear as far as I can see. In fact, it’s a most impossible to imagine buying this pair at this moment in time, as I see a significant amount of resistance between the 1.28 and the 1.30 level. In fact, if we can get back above the 1.30 level, at that point in time I would consider the trend changing at that point. Until then, I have no interest in buying and can only sell and sell again as we ultimately shouldn’t be fighting this type of the move as it shows so much strength.