EUR/USD Forecast April 5, 2013, Technical Analysis

The EUR/USD pair initially fell during the session on Thursday, but after the ECB meeting we saw the Euro gain quite a bit after it is apparent that the ECB isn’t willing to step in and do something to weaken the common currency. The candle stick is a bizarre looking hammer, and as a result it does appear that we will finally test the 1.30 level again. However, with today being Nonfarm Payroll Friday, if possible that we could see just about anything happens.

This pair tends to be sensitive to this type of announcement, and as a result is going to be interesting to see the way the market moves. We see quite a bit of resistance above near the 1.30 handle, and extending all the way up to roughly 1.31 in the near-term, and as a result think that a selling opportunity will present itself rather soon.

The trend is very strong to the downside, and we do believe that it will continue. However, these pullbacks do tend to come from time to time, and it must be said that the Euro seems to defy logic quite often. The situation in Europe has not changed one bit, and there is a lot of distrust of European politicians at the moment. It won’t take much for some type of bank run in the peripheral countries on the continent to bring concerned about owning the Euro back into the picture. Because of this, we feel that this market is essentially one bad headline away from falling back apart. In that type of scenario, it is very difficult to hang onto a long position in this market. It is because of this that we did not get involved to the upside, and think that this is simply going offer us a nice selling opportunity in the long run.

We don’t feel comfortable buying this market until we are well above the 1.31 handle, and truthfully would prefer to be above the 1.3250 level. Ultimately, we will be looking for resistance and exhaustion candles on all time frames in order to start shorting again.


EUR/USD Forecast April 5, 2013, Technical Analysis

Written by FX Empire