By: Christopher Lewis
EUR/USD is a pair that the whole world seems to worry about. Even as the pair has been very difficult and knee-jerk prone, people still go on about it in the forums. The conversations are all about the central banks, the debt markets, the supply and demand, and the “rigging” of the market. The best advice in a situation like this is to simply no bother with listening to your fellow traders!
The candle for the session on Wednesday formed a bearish looking doji, and shows that perhaps we are starting to run into the top of the easy pips to be had. The market looks as if it wants to pullback, and certainly there is always going to be the potential for a headline shock to do just that.
Head and Shoulders? 1.3250 as well…
The 1.3250 level looks very interesting to me. The pair looks as if it is having a major amount of resistance at the level, and it is in this context that I look at this market. The problems in Europe are far from being solved, and in fact we saw Spanish bonds spike during the Wednesday session, and it appears that the debt issues in Europe could suddenly be in the spotlight again. Needless to say, this would be bearish for the Euro.
A break of the bottom of the candle for the Wednesday session would be a sell signal to me as it shows that the pair wants to find the 1.30 level again. The 1.30 level is a very important one as well, as a break below it would show a head and shoulders giving way. This would measure as 500 pips tall, and this would suggest that the pair is falling down to the 1.25 level.
.png "EUR/USD Daily 3/22/12")
The pair also has massive resistive at the 1.35 level. This makes me bearish on a rally also, so as the pair looks like a sell, and going forward with all of the problems in the EU presently – I have no real interest in owning Euros overall. The pair is a sell only one to me, but I need to see a break below the range for Wednesday, or weakness at 1.35 to do so.