The EUR/USD pair went higher during the course of the day on Friday, as the nonfarm payroll numbers missed just slightly. That being the case, the fact that we had to hammers previously suggests that the market had support to begin with. That being the case, we look at this market with a bit of skepticism though, as we recognize that quite a bit of selling happen at the end of the day. We also recognize of the 1.35 level above is massively resistant, so quite frankly we would be willing to sell any type of resistant candle in that area as well.
Quite frankly, this market is one that we do not trust on any bounce, and we believe that it’s only a matter of time before the trend reasserts itself. The trend has been very bearish lately, so the fact that we ended up bouncing during the day on Friday isn’t that big of a deal, and even a move to the 1.35 level wouldn’t be that big of a deal. It doesn’t change anything until we clear the 1.3550 region, something that probably isn’t going to happen.
That being said though, we do recognize a move above there has ramifications that would have the market going positive again but in the short-term we believe that rallies will continue to offer selling opportunities as the market has not hit the real support area that we are paying attention to, the 1.33 handle below. With that, we are still bearish, and still expect to be for some time, recognizing that the area will more than likely cause a bounce itself, just as the 1.34 handle did.
If we get above the 1.3550 level however, we think that this market would then go looking for or the 1.37 level, essentially going back into the previous consolidation area. Ultimately, we suspect that down word is probably the path of least resistance, but recognize that the bounce is needed in a market that is far oversold at this point in time. With that, we are sellers, we just don’t know where.
