While the Euro has rallied a bit during the trading session on Monday, most certainly bolstered by weaker than anticipated ISM Manufacturing PMI figures in the United States, the reality is that we are still very much in a downtrend, and there are a couple of major resistance barrier it’s just above that will come into play. With that being the case, it should just set up a nice selling opportunity, especially near the next couple of large figures.
The 1.11 level should continue to offer resistance, as it was previous support. It also has recently sold off at that area, and beyond that it’s likely that we are going to see this impulsive move based upon the announcement where out. If we were to break above the 1.11 handle, the market then finds plenty of sellers at the 1.12 level next, and of course the 200 day EMA which is sloping lower from there. Keep in mind that this reaction based upon the figures is probably short-lived, because quite frankly the European Union has a whole mass of issues out there, and it’s probably only a matter of time before those come back into focus. Looking at this market, if we were to break down below the lows of Friday, then the “trapdoor opens” and therefore we can go down to the 1.09 level, and then eventually down to the 1.0750 level where there is a large gap. At this point, I am a seller at the first signs of weakness, and it’s very likely that most of the trading community will continue to do the same, as money flows back into the US stock markets based upon the “Santa Claus rally” that almost always happens during the month of December. Beyond that, there is the entire mass that is Brexit hanging over the European Union.
The 1.11 level should continue to offer resistance, as it was previous support. It also has recently sold off at that area, and beyond that it’s likely that we are going to see this impulsive move based upon the announcement where out. If we were to break above the 1.11 handle, the market then finds plenty of sellers at the 1.12 level next, and of course the 200 day EMA which is sloping lower from there. Keep in mind that this reaction based upon the figures is probably short-lived, because quite frankly the European Union has a whole mass of issues out there, and it’s probably only a matter of time before those come back into focus. Looking at this market, if we were to break down below the lows of Friday, then the “trapdoor opens” and therefore we can go down to the 1.09 level, and then eventually down to the 1.0750 level where there is a large gap. At this point, I am a seller at the first signs of weakness, and it’s very likely that most of the trading community will continue to do the same, as money flows back into the US stock markets based upon the “Santa Claus rally” that almost always happens during the month of December. Beyond that, there is the entire mass that is Brexit hanging over the European Union.