EUR/USD Choppy During Monday Session - 27 January 2015

The EUR/USD pair initially gapped lower at the open on Monday as the Greek election brought in the far left and a potential decoupling from previous austerity measures. That being said, the market had a bit of a knee-jerk reaction, but at the end of the day we ended up covering that gap as the market thought better of the possibility of doing such a thing. After all, to say that you want austerity scrapped and actually having it happen are two different things.

However, we are most certainly in a downtrend and I certainly wouldn’t be buying the Euro at this point. I think there are far too many issues in the European Union right now to trust the currency, and every time it rallies I simply look at it as the US dollar going on sale. I think that the 1.15 level above is massively resistive, so I have no interest whatsoever in buying this pair because of the significant support that the area once was. In fact, every time this pair rallies I am looking to sell it on signs of weakness, and would even do so on shorter-term charts.

Heading to major levels below

I feel that the Euro is heading down to the 1.10 level, as it is the next major level. That area will be massively supportive, and as a result I think that the market will probably take a bit of a pause in that general vicinity. However, let us not forget that any shocks out of Greece could in fact throw this market into disarray. We are seeing certain brokers change margin requirements for various pairs around the world, so certainly there is a certain amount of unease about the currency markets right now.

Sooner or later, there will come a nice buying opportunity in this pair, but we haven’t even began to form some type of base yet. So in other words, I think that this pair will continue to offer plenty of selling opportunities in the near term as the US dollar is still favored.

EURUSD 12715

Christopher Lewis

Christopher Lewis has been trading Forex for several years. He writes about Forex for many online publications, including his own site, aptly named The Trader Guy.