The EUR/USD pair rose over the session on Tuesday as the markets were in the risk on mode for most of the day. The Euro is simply far too weak and toxic at the moment to own for any length of time. The Spanish had a decent debt auction, and perhaps this was a reaction to that. However, the downtrend is obvious and undeniable - so we are not willing to buy. In fact, the selloff in the later hours of the day has us thinking sell now. A breakdown below the lows would have us selling and a break below the 1.26 handle would have us selling aggressively down to 1.19, which we see as the next major support area. Buying isn't a thought until we close well above the 1.3050 level.
EUR/USD Forecast January 18, 2012, Technical Analysis