The EUR/USD pair did break higher again during the session on Monday, but this market still faces a significant amount of resistance above. Because of this, I have no interest in buying this market, even if I do believe that we could very easily go higher in the next session or two. I believe that if you see a resistant candle between here and the 1.28 level, you have to consider selling. I believe that the market has a significant amount of resistance between the 1.28 level and the 1.30 level. In other words, I have no interest in buying this market until we break above the 1.30 level, which is very unlikely anytime soon.
On top of that, I believe that we have just formed a bearish flag, and we are in fact testing the bottom of that bearish flag. With that, we could continue to see quite a bit of selling pressure and I believe that ultimately this market does break down.
I believe we have much lower levels coming
I believe based upon longer-term charts, that this market has much lower levels ahead of it. We could easily go down to the 1.25 level again, but once we break down below there we believe that the market will continue to go much lower, probably down to the 1.2050 level which was the beginning of the uptrend that we have now smashed through.
Ultimately, I don’t really see an opportunity to buy this market anytime soon, but I do recognize that the 1.30 level will be a significant move to the upside and would certainly show a changing of the momentum. If we were to do that, the market could go much higher.
The pair should continue to drop from here, and then find a lot of work below. However, I do believe that we will see lower moves in this area. The market will continue to focus on US dollar strength, and the fact that the European Central Bank will have to continue to think of monetary policy being loosened.
