Thursday saw a selloff in the EUR/USD again. The 1.45 area seems to be an area that sellers are willing to step in and get involved, and this past time has been no different. The biggest problem with trading this pair at the moment is that it has formed a bullish flag, a downtrend channel, and a consolidation area all at the same time. This chart is a mess.
However, if you think about it – you should expect this. The pair involves two currencies that presently have a ton of bad economic factors behind them. The Philly Fed number came out at a negative 30.7 on Thursday, when it was expected to be 4! The slowdown in manufacturing is somewhat staggering, and could lead us into recession. The Euro zone’s problems, well…..they are too many to list at this point.
We see this as a scalper’s market until we can close on a daily candle above 1.45, or below the 1.40 area. Until then, we are not willing to put on any positions of significant size.
Written by FX Empire