EUR/USD pair fell during the Friday session, to test the recent lows at the 1.2150 level. This bearish candle smashed through three hammers and a doji in one sudden move. This suggests to us that the bearish case continues, and the momentum will certainly continue into next week. We think anything remotely looking like a rally should be sold at this point as the sharks will certainly have smelled blood in the water.
The recent bearish flag suggested a print of 1.15 before the move stopped, and we see absolutely no reason why I won’t happen now. With the Spanish bonds suffering, and now they’re Italian cousins doing the same, we suspect the selling of the Euro continues well into next year. A break of the Friday low has us adding to our short position, as does any rally that fails. There is absolutely no reason to buy the Euro at this point.
Written by FX Empire