By: Christopher Lewis
The EUR/USD pair is still the epicenter of all things Forex at the moment. The pair is without a doubt one of the biggest influences on the financial markets as a whole as Europe works its way through the financial problems found in not only the banks, but the debt markets as well.
The Spanish and Italian bond markets are starting to spike as far as yields go again, and this simply signals another round of concern when it comes to these areas. The periphery of the European Union continues to struggle at the bond auctions, and this will without a doubt be one of the biggest stories as the year drags on. Yes, it is true that a lot of the market participants are simply bored with the problems in Europe, but the reality is that several of the countries are probably bankrupt, and this is a major issue that won’t be fixed in short order at all.
The fear comes back.
The EUR/USD pair is showing signs of contagion fears yet again. The markets are going to have to focus on things like Spanish yields again. The pair has been sold off hard, but is sitting just above the 1.30 level which is a massive support level. The area will have to be broken to the downside in order for selling to be something I am comfortable with.
The buying of the Euro is something that I simply will not do at this point. Not only against the Dollar, but against most other currencies as well. The area simply has far too many problems for me to invest in its future at this point. As a result, all of my plans involve me selling this pair at the moment, and in fact – it would take a daily close above the 1.35 level in order for me to even consider buying.
.png "EUR/USD Daily 4/11/12")
If the market can close sub-1.30, I would be willing to sell it. Also, on rallies I will be looking to fade as well, as the overall trend seems to be of weakness.