EUR/USD pair rose initially during the Friday session as the 1.30 level keeps offering support, but the market gave up gains as we entered the US session. The pair is presently fighting it out at a massive level, and this market looks very bearish at the moment.
With the whole world running from anything European related and the bond yields in places such as Italy and Spain are starting to see higher levels again, even after the recent actions taken by the ECB. The fact that nothing seems to “fix” the Euro has us extremely concerned about owning the currency at the moment, and this pair is no different in that regard.
The Dollar will continue to have a safe haven bid under it as capital continues to flow into US Treasury notes. The market is very headline sensitive at the moment, and the Euro will continue to be hit hard by random bad news going forward. With the area going into recession, this will not help going forward either. The European Central Bank is expected to start a printing campaign during the year coming up as well, and this of course will weigh on the value of the Euro overall. With these two factors on top of the debt concerns, the Euro certainly seems somewhat doomed for the foreseeable future.
However, the 1.30 level continues to frustrate the sellers. The level is supportive all the way down to the 1.29 mark, and will continue to offer a fight. With that being said, one cannot help but notice the recent attempts at rallies that simply fail and fade during the second half of the trading sessions. Because of this, we think that the first weeks in January will be very important in this pair and could finally see the move we all have been waiting for. We would gladly and aggressively sell this pair below the 1.29 level and on rallies as well. We cannot buy until we get above the 1.35 level as it would show a real change in market sentiment regarding the Euro.
Written by FX Empire