Euro falls again during the week to break the back of a hammer

The EUR/USD pair has broken down again during the week, slicing through the bottom of the hammer from the previous week. Because of this, the market should continue to rollover and continue to go much lower. I think that short-term rallies will offer selling opportunities, and I think that the market will more than likely wipeout the most recent rally, perhaps reaching down to the 1.1550 region. I believe that rallies at this point can’t be trusted, we need to find a significant bottoming pattern to take advantage of.

If we were to break down below the 1.15 handle, this market would unwind rather drastically, because it is so much lower than the recent noise that we had been part of. When I look at this chart, there was a bullish flag that signaled we were going to go to the 1.32 handle, but at this point it looks as if this is all but wiped out. I don’t have any interest in buying the summer, as it looks like the greenback will continue to be supported by higher interest rates. Beyond that, the ECB has toned down its rhetoric on stepping away from quantitative easing, and it’s likely that we will continue to struggle to find any significant continuation of bullish pressure. I believe that this pair will continue to drop from here, but a short-term bounce could come. If it does, look at that as value in the greenback.

EUR/USD Video 21.05.18