The EUR/USD pair fell hard during the session on Wednesday, as it testing the 1.12 handle. This is an area where I would expect to see a little bit of support, but quite frankly I think we go down to the 1.20 region first, before possibly finding enough support to start bouncing again with significance. I think that the 1.20 region is massive as far as support is concerned when it comes to the monthly charts, so with that I believe that the market will continue to grind its way down to that area, but it won’t necessarily be easy and a straight shot.
I would not be surprised at all to see this pair bounce from time to time, but I think that’s only going to offer selling opportunities. With that, I’m going to stick to short-term charts, and remain bearish of the Euro in general. I think that eventually we get the buyers coming back in near the 1.20 handle, but that probably isn’t going to be for several weeks at this point.
Possibly quiet January
It’s possible that January might become a quiet, as the markets are starting to reach fairly serious regions of support. This is true in several different currency markets right now, not just the EUR/USD pair. Quite frankly, this is one of those trends that have been going on so long, that it’s almost impossible to imagine it continuing for much longer. Essentially, I don’t think there’s too much in the way of volume as far as selling is concerned left.
In the meantime though, I think that we will have short-term selling opportunities again and again. I think the first couple months of January will offer shorter-term rallies that can be faded, as a US dollar certainly isn’t done going higher. To the higher this pair bounce is, the more interested I am in selling it. If we did manage to break above the 1.26 level however, at that point time I would consider the trend changed and would have to start buying the Euro.
