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The EUR/USD pair had a very volatile session on Monday, but a fairly tight range. It looks like the 1.31 level is going to be somewhat resistant, but let's be honest here: this pair is way overextended. Because of this, we expect a pullback anytime in the near future, and could see a fall back down to the 1.28 level before any significant support comes into play.
We also are very negative on Europe's fundamentals, and as such we think this pair should be lower. We understand that the quantitative easing announcement certainly push down the value of the Dollar and thus by default push of the value of the Euro, but we think this is a relatively short term phenomenon. The Europeans need a lower valued Euro in order to be competitive as they enter recession. It is probably only a matter time before they see that. Nonetheless, we think that support at 1.28 will catch any fall from this level. As far as buying, is far too overextended do so now.