Euro falls again on Monday

The EUR/USD pair would be in a lot of trouble if we do make a fresh, new low, roughly the 1.2050 level. I think at the very least we would look at the market unwinding to the 1.20 level, but quite frankly this is an area that has to be supportive if there’s any hope of an uptrend going forward. Recently, Mario Draghi has suggested that the European Central Bank may have to keep interest rates low for an extended amount of time, and that of course is very negative for the common currency.

Marry that information with the fact that we have seen interest rates in the market going higher, and it makes sense that we are starting to see a bit of a selloff. Overall, I think that the market will probably be very noisy, but at this point I think that this pair is probably one of the least attractive pairs to trade, as high-frequency traders and robots drive it more than anything else. At this point, it’s a matter of waiting to see what the robots are doing. I think we will continue to see pressure to the downside, but if we were to turn around and break above the 1.2150 level, we could go much higher, as it would confirm a hammer from the Friday session, which of course is a very bullish sign. Alternately, breaking below that bullish sign is extraordinarily negative. Start out with a small position regardless of what happens.