The EUR/USD pair attempted to rally on Thursday but failed miserably. The 1.25 level brought out the buyers, but they simply weren’t enough to stop the move lower. At the end of the session, we had a shooting star at the bottom of the downtrend. This sets up an obvious signal to us: Selling aggressively on a close below the 1.25 level. The pair is going to continue to suffer for the bad news coming out of Europe. The Dollar will continue to be the safety currency that most run to, and the pair now looks as if it is trying to enter a new phase of bearishness.
Conversely, there is always the possibility of a bounce. A break of the top of the Thursday shooting star would offer strength in this market, but we think it would only be a great opportunity to sell weakness at higher levels.
Written by FX Empire