The EUR/USD pair initially tried to rally during the day on Wednesday, but found far too much in the way of resistance pressure at the 1.07 handle. Because of this, we ended up forming a shooting star and that of course is a very negative sign, but top of that, we are at the bottom of the major downtrend which of course makes this an even more negative sign.
At this point, I don’t really see an opportunity to go long of this market, and quite frankly I am not even thinking about it until we break well above the uptrend line that has now been sliced through. The fact that we formed a shooting star shows just how little faith buyers have in this market, and at this point in time I feel that every time we rally it has to be looked at as value in the greenback.
Divergent Economies
The European and American economies are starting to diverge yet again, as the American jobs numbers showed a couple of weeks ago. With this, every time we rally I suspect that you can look to short-term charts to scalp the market to the downside. I recognize of the 1.05 level below will be supportive, but ultimately that is a question for another day. Between now and then, I think that it is a significant shorting opportunity after another coming, and therefore I think short-term traders will continue to profit.
I don’t typically like scalping markets, but this is certainly one that has no real strength to it, and as a result I think it can be done here. On top of that, you have to look at the Euro against most of the other currencies around the world, and quite frankly it all tells me the same thing: the Euro is in serious trouble going forward. I continue to sell the Euro anytime it tries to rally.
