The EUR/USD pair fell during the course of the session on Thursday, as the market tested the 1.2250 level. That area as far as I can tell is significant support, and as a result if we break down below there with any type of force, I will start selling the Euro yet again. After all, this is an area that has offered a bit of support from time to time, and we are most certainly in a downtrend out the Euro continues to suffer.
On the other side of the equation, the US dollar is the most favored currency in the Forex world right now, and because of that I believe that this market will continue to trend strongly to the downside. Ultimately, it’s only a matter of time before we break down to the 1.2050 region, which was where the uptrend started that we have now absolutely wiped out. With that being the case, I think that you can only sell this market going forward, as every rally should be thought of as potential value in the greenback.
Strong downtrend should continue
The strong downtrend that we have seen for some time should continue as far as I can tell, although I do recognize that a bounce could happen at this area. Quite frankly, that would only end up being a selling opportunity going forward, and as a result I think it’s a market that simply is begging to be sold going forward. I think that the 1.25 level above is massively resistive, and as a result it’s very unlikely that we will break above there with any type of momentum.
Even if we did, the 1.28 region is the start of a significant amount of resistance all the way to the 1.30 handle, and that being the case I think that a move above the 1.30 level should be a signal that the trend has changed, but ultimately it’s very difficult to imagine that it’s going to happen anytime soon. Every resistive candle after a rally for me is going to be a sell signal.
