The EUR/USD pair broke higher during the session on Wednesday, but as you can see gave back about half of the gains. We did form a hammer during the Tuesday session though, so it’s not a huge surprise that we got a little bit of support. I think that the 1.32 level above has a significant amount of resistance, and that’s why I drew the line on the chart. You can see that the gap on the chart is right at that level, so I am looking for some type of resistant candle in order to continue selling the Euro.
The European Central Bank has an interest rate announcement during the session today, so that being the case it’s very likely that we will see a significant amount of volatility. On top of that, I believe that the interest-rate announcement sell probably won’t be the main attraction, rather the Q&A of the press conference it will be afterwards. The markets will be paying quite a bit of attention to the ECB President Mario Draghi, and what he suggests as far as any potential monetary policy changes that could be implemented by the central bank.
The trend is set, and any bounce is simply a selling opportunity.
The trend is set in this market, and as a result it’s very likely that anytime this market bounces, there will be sellers stepping in. I believe that the 1.32 level will continue to be massively resistive, and I have no interest in buying this market until we change the trend. In fact, I don’t believe that the trend changes until we get above the 1.34 handle, on the daily chart. With that, I have absolutely no interest in going short and I still believe that the US Dollar will continue to be king and when it comes to the Forex markets. Ultimately, we believe that this market goes down to the 1.30 level, and then after that the 1.28 level where there is even more significant support. Down there, we could get a massive bounce, but between here and there I see no reason to step in front of this freight train.
