The EUR market was very very bearish yesterday and took out a well-defended barrier at 1.2900, but it was unable to break below technical support at 1.2870. Now we have the choice of either closing the opening gap from yesterday morning back to 1.3050 or reversing lower to retest the major support level.
Bit of a coin toss really as to which one happens, and much will depend on the German data, but whatever happens in the short-term to this pair could very well have an important influence on which way the next 10 big figures go; 1.19 or 1.39. With USD sentiment improving and EUR sentiment headed the other way, I’m clearly in the 1.19 camp but I’ve been wrong on the odd occasion before 🙂