Euro initially rallies, and then turns around during the week
The EUR/USD pair initially tried to rally during the week but found enough resistance near the 1.24 level above to roll over and form a bit of a shooting star. Ultimately, this market does have a significant amount of support underneath though, and the 1.21 level underneath is the bottom of this overall range. Because of this, I think it’s easier to trade this market from a shorter-term perspective, perhaps looking for back and forth opportunities with the stochastic oscillator or something like that. I like the overall uptrend still, but obviously we are essentially stagnant over the last couple of months. Even though this is a very negative candle, it doesn’t necessarily prove anything.
Your capital is at risk
The 1.21 level being broken down underneath will more than likely send this market looking towards the 1.18 level. The alternate scenario is that we bounce underneath current levels and continue the overall sideways action. If we can eventually break above the 1.25 level, I think that the market goes to the 1.32 level, based upon the bullish flag that we had formed on the weekly chart and have broken above. Ultimately, I think that the market should continue to see interest on dips, as it offers value. However, this is a very difficult market for the longer-term trader, and an extreme amount of patience would be needed for anybody trading this market. I favor the upside, but quite frankly I think there are better places to put money to work right now.