The EUR/USD pair initially tried to rally during the course of the day on Monday, but as you can see ended up falling back down to form a shooting star. The shooting star of course is a very negative sign, and that’s especially true when it’s on the bottom of a downtrend. This shows that the buyers simply could not pick up this market even though it is so soft. In other words, there are plenty of sellers in this marketplace, and at this point in time, you would have to think that the market would run out of them. However, we obviously have not.
Because of this, the market looks like it’s continuing lower from here, and as a result we still believe that the market is probably heading down to the parity level. With this, I am a seller of this marketplace. Every time it rallies, as it is simply impossible to own the Euro. With any type of confidence at this point in time.
Continued softness.
I believe that we will see continued softness in this market, and as a result it’s almost impossible to buy as the market will continue to focus upon the liquidity measures of the European Central Bank, and as well as the fact that the Europeans could be facing deflation, as this will force the central bank to continue its liquidity measures going forward, and probably even expand it.
I believe that the 1.10 level above remains a bit of a ceiling in this market, and as a result I do not think that the market can get back above there. It was once a massively supportive area, and as a result it makes sense that the market may trying that area for resistance again, but quite frankly I don’t see any reason why the sellers won’t come back in and take advantage of value in the US dollar. With that being the case, I continue to sell rallies on short-term charts as this market can be picked at again and again and again.
