Euro falls significantly during trading on TuesdayThe EUR/USD pair break down significantly during the trading session on Tuesday, reaching towards the 1.18 level underneath. I believe that the market has shown that it is ready to roll over, and it wouldn’t take much to make that happen. We printed a hammer during the weekly timeframe last week, and now are testing the very bottom of it. The bottom of a hammer being broken is an extraordinarily negative sign.
The Euro struggled mightily during the trading session on Tuesday, as we have reached towards the 1.1825 region, and tested the bottom of the hammer. That of course is a very negative sign if it breaks, and I believe the market would probably unwind towards the 1.15 level underneath, an area that is significant on longer-term charts. It looks as if the US dollar will continue to strengthen during the summer, despite the fact that it looked as if we were going to get some type of reprieve in this market after forming the hammer from last week. At this point, it looks very much like a market that is in jeopardy, and that we should continue to go much lower.
If we do bounce, I suspect there will be sellers above just waiting for the first signs of exhaustion. I think that the market has shown just how fragile bullish pressure is, and I think that this move cannot be ignored. The 1.15 level should be massively supportive, so I don’t know that we are going to break down below there, but most certainly it looks as if it is a reasonable target over the next several months. There are a lot of short-term traders involved in this market, so course it will be very volatile. If we do break the bottom of this hammer on the weekly timeframe, that’s an extraordinarily negative sign.