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The EUR/USD pair rose rapidly on Friday as the European Union meeting announced that the leaders had come up with a “solution” to funding Spanish banks. The ECB looks likely to cut rates this coming week, and as a result it looks as if the market could turn right back around. Also, there is a shortage of details in this announcement, and this makes us cautious.
However, it must be said that the move was strong, and this has to be acknowledged. In the end, the pair is still trading within its previous range of 1.24 – 1.28 and this could also play against the Euro as well. Because of this, we are looking for a weak candle to sell. We certainly won’t buy up here – this would be chasing the trade.