The EUR/USD pair tried to rally during the course of the day on Wednesday, but as you can see struggled at the 1.10 level and pulled back to form a shooting star. With that being the case, it looks as if the market is simply repeating what we had seen in the Tuesday session, as the Euro continues to struggle in general. I believe that the market then looks very soft and it’s only a matter of time before we head back down towards the 1.05 level. With that being said, if we can break down below the bottom of the shooting star from the Tuesday session, I think that the market should be able to be sold, as it would show a resumption of the downtrend.
I believe that the 1.12 level is the top of the resistance, which of course starts the next consolidative block. In other words, it’s going to be very difficult for this pair to rise for any real length of time as the easy money going long has already been made.
Selling rallies
This is a marketplace it all you had to do is sell the rallies of the last several months, and you have made money. I continue to do the same thing, as I really don’t see any interest in owning the Euro for any real length of time. The US dollar continues to be the favored currency by Forex traders around the world, and as a result I think that this pair will in fact not only head back down to the 1.05 level given enough time, but probably break down below there and head to the parity level. In fact, most pundits in the Forex world now believe that the two currencies will be one value, and as a result I believe that there will be continued selling pressure until we get to that level. I would not buy this pair until we broke above the 1.15 level, something that we are not going to see anytime soon.
