The EUR/USD pair fell during the course of the session, as we are now cleanly below the 1.18 level. We did bounce a little bit though, and it looks as if we make it a selling opportunity after rallies. I believe that the markets probably going to go looking towards the 1.17 level next, and then eventually the 1.15 level if we break through that level. Longer-term, the target of course is still the 1.25 level, but the last few sessions certainly have done a lot of technical damage to this market. Ultimately, I believe that the market will try to break to the upside. It doesn’t look like we’re ready to do so again, so I think the patience will be needed by those who are longer-term minded for the uptrend.
If we did breakdown below the 1.15 handle, the market would essentially have broken the uptrend, and should return to much lower levels. I think that the next couple of weeks in this market will determine where we go for the next several months, so it’s certainly one worth paying attention to. However, the EUR/USD pair is the domain of high-frequency trading, and therefore tends to be very noisy on a day-to-day basis. Ultimately, small position sizing is probably the best thing that you can do to protect yourself against the noise and trouble that we are almost certainly going to continue to see. Ultimately, the markets prefer to buy this pair when economic times are good, and the ECB is projecting that the European Union is strengthening. Because of that, I think that given enough time we will have that happen. Ultimately, you should follow the charts but right now it suggests that we are going to continue to see a little bit of weakness.
Written by FX Empire