The EUR/USD pair fell during the session on Thursday as the area just above is resistive. However, the buyers have been out in full force as you can see from the trend line on the chart. The 1.3150 level that repelled price two days ago is a lower high that we've seen previously, so this of course is something that we need to pay attention to. I personally don't like the Euro in general, but the truth is that the world is getting excited for a potential Spanish bailout.
The 1.30 level starts a 500 pip area that is extremely noisy. I personally believe that the area will be far too much for the currency pair to slice through without some type of massive announcement for Spain. Nonetheless, it's hard to imagine that flooding the system with Euros will do much for the value of the currency over the long term, and as such I think eventually we will see a great plunging in this pair.
However, as I say this I do understand the fact that quite frankly, this pair is higher than I thought it would go. I think this currency pair more than likely will continue its erratic behavior going forward, and as such it is certainly not one of my favorite ones right now.
Trend line
For myself, I think the trend line is the most important support or resistance area on this chart. If we can manage to break below it, I would start selling at that point. If we managed to break below the 1.28 handle, I would start selling aggressively. I think that we may eventually see this, but truthfully this pair will be so headline driven from the meetings in Europe that it's hard to anticipate the direction.
As I stated previously, I believe there is a lot of noise up to the 1.35 level if we get above that level, this would mark a new leg higher in this currency pair that at this point time would make it a "buying only" proposition. Until then, I will be very suspicious of Euro strength overall. If I choose to buy the Euro, I will do it against other currencies.