The EUR/USD pair did very little during the session on Friday, which of course isn’t much of a surprise to me considering that the Greeks are voting on whether or not to pay back the loans on Sunday, and of course the Americans were away for the Independence Day holiday. Because of this, there probably wasn’t much in the way of trading, and to move the markets would have been asking quite a bit.
When I look at this chart, I have an uptrend line that the market is still respecting, and of course I believe that the 1.10 level below will possibly be supportive as well due to the fact that it is a large, round, psychologically significant number. Also, you have to keep in mind that there is a cluster of support going all the way down to the 1.09 level, which means that it’s going to be very difficult sell this market overall.
Even if we break down…
Even if we break down in this pair, I think we will only go about as far as 1.05, worst-case scenario. The reason I say this is because the market looks like one that is trying to change the trend, and quite frankly the other day when the Greeks technically defaulted on the IMF loan, the Euro didn’t really drop that far. In fact, the pullback in the Euro wasn’t any more stringent than any other pullback that you see from day-to-day. In other words, I don’t know that there’s anybody left to sell this particular currency. The so-called “smart money” will often enter the marketplace long before the rest of the world, and I think that’s part of what we are seeing down in this area. With this, I actually am bullish but I recognize that there will be a lot of volatility. Because of this, I am keeping my trade positions fairly small, allowing me to stay in the position for the longer-term. Once we get above the 1.15 level, the market will more than likely change trends completely.
