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The EUR/USD pair rose during the session on Tuesday, but gave back much of the gains in order to form a shooting star. We remain firmly under the 1.30 level, and this should signal that a real fight is coming up in this pair.
The real question in this market is whether or not the market participants are focusing on Europe, or the United States. This seems to go back and forth over time, and as such every time we get involved in this market we have to be aware the fact that the market seems to go back and forth as to which side of the Atlantic it once the focus on. As a general rule, whatever side of the Atlantic they are paying attention to is the one that does much poorer.
We have a trend line on this chart that suggests that we could possibly sell on a break down below it, but we would need to see a solid daily close south of the 1.2750 level. As far as buying is concerned, we would buy supportive action closer to the trend line.