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EUR/USD tried to rally during the Monday session, and although it did succeed to a point looks very weak nonetheless. The 1.23 level was overtaken again, but only just and without any serious conviction. This has all the makings and looks of what is known as a "dead cat bounce", and as such we are still looking to sell this pair on signs of weakness. A daily candle that forms a shooting star would be absolutely ideal, but we understand that the market may not give us the best set up visually.
With this in mind, we are willing to sell anywhere between here and the 1.27 area that shows significant resistance. We think that there will be headlines out of Europe that will continue to push the value of the Euro down, and as such we are not willing to buy it even though we see a potential bounce from this level.