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EUR/USD pair fell during the Friday session, to test the recent lows at the 1.2150 level. This bearish candle smashed through three hammers and a doji in one sudden move. This suggests to us that the bearish case continues, and the momentum will certainly continue into next week. We think anything remotely looking like a rally should be sold at this point as the sharks will certainly have smelled blood in the water.
The recent bearish flag suggested a print of 1.15 before the move stopped, and we see absolutely no reason why I won't happen now. With the Spanish bonds suffering, and now they're Italian cousins doing the same, we suspect the selling of the Euro continues well into next year. A break of the Friday low has us adding to our short position, as does any rally that fails. There is absolutely no reason to buy the Euro at this point.