The EUR/USD pair fell hard on Thursday to continue the general slide of the Euro over the last several sessions. The EU has major issues, so this really shouldn’t be a surprise at this point. In fact, it looks as if the market is finally over the “rescue” of Greece, and we are now starting to see true sentiment return to the pair.
The fact that the pair couldn’t get back to the 1.35 level is telling. The breakout above the 1.3250 to 1.33 resistance area really should have sent this pair up to the level. The failure is a massive signal overall, and this gets us thinking sell in general. We would like to see a bounce of sorts in order to do so, and with Non-Farm Payroll coming out today, we could see a sudden move. However, if this pair shoots straight up, we are more than willing to short it once it gets closer to the 1.3250 level.
The 1.30 level below is a major one, and any break below that should send this pair down to the 1.26 level in relatively short order. Without a doubt, the major headline risk in this pair is with the Euro, and that will basically all be negative for it. The Spanish, French, and Dutch are all starting to see their bond markets affected, and as a result we think the European Union is going to be a place that most currency traders will want to avoid going forward.
In fact, this is a “sell only” pair for us. We are simply either short of it, or we are flat – there is no other position to consider at this point. Until we get above the 1.35 level on daily close this won’t change. The breaking of that level would of course show us real momentum to the upside, and we couldn’t ignore it obviously.
At this point, we are fading rallies and selling a break below the 1.30 handle. Until either happens, we will simply be patient as this market is very dangerous these days.
Written by FX Empire