The EUR/USD pair did very little during the session on Monday, as we continue to grind just below the 1.14 handle. That area has been rather resistive, and I believe that there is a significant amount resistance all the way to the 1.15 handle at that point. Ultimately, I feel that any type of resistive candle between here and there is a nice selling opportunity, as the market would then more than likely continue the downtrend based upon the massive bearish pressure that we have seen for some time now.
Ultimately, I think if we do see that, this market will head to the 1.11 level first, and then eventually the 1.10 handle. That area of course will be rather supportive, but I believe eventually we will break down below there and head much lower levels. In fact, it’s very likely that the market will possibly reach parity given enough time. There are lot of analyst out there that are calling for it at least, at this point time I think it is a little bit early to suggest that but it wouldn’t be much of a surprise. After all, it wasn’t that long ago that we were trading at the 1.40 level.
Downtrend continues
I feel that as long as the European Central Bank have to keep its monetary policy as loose as it is right now, it’s very unlikely that this pair is going to turn around. In fact, I believe it would have to break well above the 1.20 level to suggest that the downtrend is over. I believe that the 1.15 level is going to cause a significant amount resistance, but between the 1.18 level and the 1.20 level is a massive amount of resistance. If we get a resistive candle between here and that level, I would anticipate that sellers will jump all over that as the Euro continues to be essentially toxic to Forex traders. Rallies should be used as entry points and considered to be “value” as far as the Dollar is concerned.
