The EUR/USD pair fell during the majority of the session on Tuesday as you can see, finding support right around the 1.3330 level for or the third time in the last week. That being the case, I feel that the market probably getting ready to serve bouncing from here, perhaps even a little bit lower. The 1.33 level in my opinion is massively supportive, and as a result the market is probably going to be a solid buy over the next couple of sessions. It’s only a matter of time in my opinion that this extremely oversold condition corrects itself. I believe that a perfect opportunity to sell at a higher level is about to present itself, and I also believe that the 1.35 level is a very interesting spot to do so from.
After all, that was an area of significant support previously, so it should now in theory be massively resistant. With that, I would sell a resistant candle in that area, aiming for the 1.33 handle again. After all, we are most certainly in a downtrend, and the European Union still looks rather weak overall. On top of that, the European Central Bank looks like it’s ready to do more quantitative easing if it has to, as the Euro in its opinion is completely overvalued.
Federal Reserve is going the other way.
The Federal Reserve looks as if it’s ready to continue easing its quantitative easing program over the course of the next several months, so I feel that ultimately this pair will probably go lower. However, markets need to correct themselves from time to time, and as a result the short-term traders will take advantage of the up move that I believe is about to happen. However, is much easier to go with the trend, and of this I am willing to stay on the sidelines until I get that nice sell signal. On the other hand, if we break down below the 1.33 handle on a daily close, I am willing to start selling at that point as well, as it would show significant bearish pressure.
