Euro rallies to begin Wednesday session, but find sellers in North America

The EUR/USD pair initially tried to rally during the trading session on Wednesday, reaching towards the 1.19 level above which of course is a large, round, psychologically significant number. I think that pulling back from there makes quite a bit of sense, and I think this will continue to be the way forward: selling rallies on signs of exhaustion. I think that the overall downtrend should continue through the summer, as the interest rates in America are likely to continue going higher. In fact, the Federal Reserve is the only major central bank that looks likely to raise rates in the near term. Because of this, it continues to look like the dollar will be favored, and I believe that the summer is going to be good for the greenback. Because of this, I don’t have any interest in buying this market unless we were to break above the major “ceiling” above at the 1.21 handle.

If we did break above there, then the market goes much higher, perhaps reaching towards the 1.25 handle again. However, it’s obvious that the sellers have come in and made the presence known, and I think we will continue to see down pressure, especially considering that Mario Draghi recently suggested that quantitative easing may last a bit longer than the market had originally anticipated. With that in mind, I think we continue to see a back and forth type of market with a dour proclivity.