The EUR/USD pair initially fell during the session on Monday, but as you can see found support below the 1.23 level enough to turn things back around and form a hammer. That being the case, we feel that this market could bounce from here but quite frankly it’s just a selling opportunity from a market that needed to bounce after selling off so hard over the last several months. We are nowhere near any significant support, and as a result we feel that any rally at this point in time should continue to show resistance.
We also recognize of the 1.25 level above is massively resistant, and as a result we are looking for resistive candle between here and there in order to take advantage of what would essentially be value in the US dollar. With that being the case, we feel that this market is probably going down to the 1.2050 level given enough time, as we have broken down below the massive support levels time and time again and quite frankly there seems to be no stop to the bearishness that we see over and over again.
It is not until we break above the 1.30 level that we would consider this trend reversed, as it has been so strong to the downside. We believe that the market should offer plenty of selling opportunities given enough time, and quite frankly with the European Central Bank looking like they are getting ready to expand quantitative easing, it makes sense of the Euro should continue to fall given enough time. The shape of the candle does in fact does suggest that there is support, and as a result we are more than willing to sell and sell again over the longer term.
We would even be willing to look at short-term charts from time to time, as they should offer plenty of opportunities going forward. With that being the case, we have absolutely no interest in buying at this point, and we recognize that this trend should continue through the rest of the year.