The EUR/USD pair fell yet again during the session on Tuesday, this time crashing into the 1.34 region. This area of course is going to be supportive based upon the fact that it is a large, round, psychologically significant handle, but at the end of the day I see this is a minor support level, not something to be to overly concerned about. With that, I still believe that the ultimate support is down at the 1.33 handle, and it appears of this market is ready to continue falling to that level.
Any type of support that we feel the 1.33 level should in fact end up being a nice buying signal in my opinion, because I don’t think that the Euro is going to suddenly fall apart. Yes, we have the nonfarm payroll numbers coming up on Friday, but quite frankly I don’t think that there’s going to be anything in that report the can absolutely crushed the Euro while lifting the US dollars that much higher.
Don’t fight the downtrend, rallies should be sold.
As far as I can see, there’s no need to fight this downtrend at all. After all, the Euro has its own problems, and the European Central Bank is probably going to have to loosen its monetary policy sooner or later. With that, the Euro has been overvalued for some time, but quite frankly we need to see some type of rally order to have a reasonable level from which to start buying the US dollar again, or shorting this pair as it were.
At this point time, I believe that the 1.35 level is in fact going to be rather resistive, so a rally to that area that should signs of resistance would be an excellent selling opportunity as far as I see. However, I recognize that we made not get much in the way of an opportunity between now and Friday, but if we do, I will not hesitate to sell this market as it has been so bearish lately.