The EUR/USD pair fell again during the course of the session on Friday, testing the 1.10 level. That area also intersects with the uptrend line that has been part of the ascending triangle on the longer-term charts. With that, it’s very likely that the market will find a bit of support in this area. However, we closed at the very bottom of the range and that of course is very negative. That’s something I cannot overlook, so if we can break down below the bottom of the uptrend line, I think at that point in time the market will more than likely reach towards the 1.08 level, and then possibly even as low as the 1.05 level. I have no illusions that this market is falling apart at the moment, but at this point in time we have not broken down through the last vestiges of support quite yet.
European Central Bank
The European Central Bank really shook the market when it suggested that perhaps more stimulus would be coming. With that being the case, the value the Euro fell against the most everything, and of course the US dollar would be one of the most likely candidates to strengthen against that currency, which of course it did. Ultimately, the market looks as if we should have quite a bit of volatility regardless what happens, so having said that you will have to be very careful. In fact, I am placing smaller trade than usual. However, I do recognize that there could be some profit to be made in this market anyway.
Quite frankly, I have been more interested in binary options as of late, simply because of the momentum going lower should allow for a lot of put buying opportunities on short-term charts, once we break down below that support level. With this being the case, I believe that the next day or 2 will be vital. On a bounce, don’t get me wrong, I am more than willing to start going long.
