The EUR/USD pair fell during the session on Wednesday but bounced enough to form a hammer. The 1.23 level looks as if it’s acting as support currently, and as such we think that a break down below that level on a daily close is needed in order to start selling again. As for buying this market, is going to be very difficult as there is nothing but noise between here and 1.27 or so.
Looking at the overall condition of the Euro, it would make sense that selling the Euro would be in your plans. However, it does look like the Dollar is going to struggle little bit, and as such selling the Euro against other currencies may be the way to go. One particular currency to sell the Euro against that looks interesting at this moment in time is the British pound. In fact, it may be a much cleaner trade them this one will be for the short term.
If we can get below the 1.23 level on a daily close we think that we reenter the consolidation area that drives this pair back down the 1.20. We certainly wouldn’t get involved in this pair from the long side until we clear the 1.27 level, and it doesn’t seem likely in the near term.
Written by FX Empire