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The EUR/USD pair fell precipitously from the 1.30 handle on Tuesday in order to test the uptrend line that has been driving this market higher sense the middle of July. This move wasn't much of a surprise to us; quite frankly it's a surprise how long it talk. If we can break below this trend line, we think this pair has much further to fall, perhaps as low as 1.25.
The shooting star from Friday signify a possible lower high and this would signify that the trend is certainly changing, at least for the time being. We have no idea why the Euro continue to rise, it probably based upon fantasy more than anything else, and as such the downside move makes more sense to us that upside one. Having said that though, we need to see the daily close below 1.2850 in order to start selling.