The EUR/USD pair shot straight up during the session on Wednesday, but gave up quite a bit of its gains in order to form something that looks quite a bit like a shooting star. The market could rise above the 1.28 level, and as the Americans sold off the stock markets in the afternoon of New York-based trading, the US dollar gained as people rushed into the bond markets.
We are extremely bearish of the Euro right now, and we believe that this rally was simply use by the sellers in order to get involved and initiate fresh positions. At this point time, the hammer that was formed on Tuesday is the support that the sellers have to break through. If we can get below the lows on Tuesday, this market will fall much further. As for buying, we would have to close substantially above the 1.28 level, something that doesn’t look overly possible at the moment.
Written by FX Empire