The Euro broke down below the 1.08 level early on Thursday, as we continue to see a lot of noisy behavior and the 1.08 level of course is an area that a lot of people would be paying attention to because it is a large round psychologically significant figure. With that being said, we could see a little bit of a drop, but if we recapture the 1.08 level, then we probably gain another 50 pips or so. When I look at the longer term charts, it’s easy to see that the Euro just doesn’t have anywhere to be, but that’s the natural state of this pair.
It’s essentially a proxy for what the US dollar is doing, and it’s not really something to trade. Unless, of course, you have the ability to babysit the charts on short timeframes. If you’re looking for a bigger move, this just isn’t going to be your market. At this point, we could drop down to the 1.0750 level, and then the 1.07 level. That would show the US dollar strengthening not only against the Euro, but probably against multiple other currencies around the world as well.
