The EUR/USD pair broke down during Thursday trading as the European Central Bank announced the more of a bond buying program than originally anticipated. Because of this, the value the Euro should continue to drop from here and we have broken down below a significant amount of support. I believe that we are now heading to the 1.10 handle, and it may be quicker than most people realize. After all, it’s no real signs of support on longer-term charts until then, so quite frankly it’s a bit of “empty space” between here and there.
This does it mean that there will be bounces from time to time on the short-term charts. I am actually looking for bounces on the short-term charts as selling opportunities because the US dollar is so highly valued. I don’t see a scenario in which the Euro should continue to appreciate, and I believe that the 1.15 level should now be very resistive as a bit of a ceiling in this market.
Cannot fight the trend, sell the rallies
It’s obvious to me that you cannot fight the trend at this point, and if we could not hold the 1.18 level, we were in serious trouble. Now that we are broken below the 1.15 handle, things look even worse in the Euro as we continue to fight back and forth. I think that the 1.10 level will be hit in the next couple of sessions, but in the meantime I’m going to be looking to the short-term charts in order to find selling opportunities. I am even talking about shorting from as low of a timeframe as the 15 minute chart.
I think you need to find bounces at this point though, because we are so oversold. Just think of them as the US dollar going on sale, and you picking up a good deal. The Euro cannot be bought at this point in time, and realistically I don’t even see a scenario that I would consider buying. We would need to form some type of longer-term buy signal, which of course we are not going to get anytime soon.
