The EUR/USD pair as you can see went back and forth during the course of the day on Wednesday, testing the 1.34 level. With that, the market turned back around and formed a shooting star. The shooting star of course is a negative sign, but I also see the 1.33 level as massively supportive, as it appears on longer-term charts quite clearly in my opinion.
With this, I think that selling this market is going to be almost impossible, at least from this level. If we rally on the short-term chart, I would expect short-term sellers to step back into the marketplace again. That being the case, it’s probably easiest to play this in the binary markets, on ultra-short-term time frames. With that being said, if you do not have access to the binary markets, perhaps looking at standard options or even smaller Forex positions might be the way to go.
The Euro has issues, as does the European Union.
The European Union has a lot of issues right now, and as a result it’s very likely that the Euro should continue to soften over the longer term. However, I recognize that a short-term bounce is possible and that’s why I have the 1.35 level drawn on this chart. That level for me is the “ceiling” in this marketplace at the moment, and as long as we can stay below there, I think that selling this market is probably the only direction you can trade it in.
If we get down below the 1.33 handle, I believe that the Euro falls apart and we had to the 1.30 handle without too many issues. That of course would be very negative, and I expect it to happen sooner or later. On the other hand, if we break above the 1.35 handle, I feel that the market will probably trying to reenter the previous consolidation area which should send this market to the 1.37 handle. That area will be massively resistive as well, and considering that it summertime, I would have a very hard time believing that we will break above there.