The Euro rallied significantly during the course of the trading session on Tuesday, reaching towards the 1.13750 level. That is an area that has previously seen some selling, so it will be interesting to see whether or not that returns. If that is going to be the case, then I think you need to pay close attention to the next move, because at the first signs of exhaustion I more than willing to start shorting this market. We are in a downtrend for a reason, and quite frankly what we are seeing now is a major correction. The real fight will be somewhere near the 1.15 level above, which is a major round figure and an area where we could see a lot of trouble at. Furthermore, the 50 day EMA sits near that psychologically important figure, so I think at this point in time we need to wait to see whether or not we can find a reason to short.
EUR/USD Video 01.12.21
If we were to somehow break above the 1.15 handle, then we could change our attitude, but right now I think it is only a matter of time before I get an opportunity to sell any signs of overbought condition. To the downside, we could be looking at the 1.10 level. Having said all of that, I am going to pay attention to interest rates coming out of the United States, because if they do continue to fall, that could turn things around.
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This article was originally posted on FX Empire
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