The EUR/USD pair initially fell during the course of the session on Tuesday, but found enough support just above the 1.05 level to turn things much more positive as the market crashed into the 1.07 level above. Ultimately, that area offered far too much resistance for the market to continue going higher, and with that we feel that the market should sell off sooner or later, as the Euro continues to struggle overall. After all, the market is in a massive downtrend, so having said that I believe that this market will continue to go lower over the longer term. On top of that, I believe that the 1.05 level below turned the market back around for the short-term only. Ultimately, I believe that the 1.05 level will get broken below, and as a result we will eventually head down to the parity level given enough time.
Selling rallies going forward
I believe that the market should sell off every time we rally, as the market is most certainly negative overall. The 1.10 level above is the ceiling as far as I can see, and that’s why I have the yellow box drawn on the chart. Ultimately, I believe that resistive candle will be a perfect selling opportunity as it not only represents the softness in the Euro, and the US dollar continues to be the favored currency around the world right now. After all, the European Union struggles with deflationary concerns, and the European Central Bank continues to liquefy the markets.
Ultimately, I believe that the parity level will make sense for currency traders, and it’s only a matter of time before we reach towards that level. I believe that the market could be very choppy going down there, so more than likely we will have to place short-term trades over and over. I have no interest in going long at all, and quite frankly wouldn’t do so until we get well above the 1.15 handle.
