5:55a GMT - Bears delivered a mighty blow to Euro bulls yesterday, knocking the pair down another 200 pips and netting us a nice profit in the process. As I mentioned yesterday technically the pair is very bearish at the moment as all short-term supports have been broken and it appears the pair is firmly back on its downward trend it has been on since December 13th.
Daily Outlook: The risk to the trade today is of course with all the downward pressure we could see the pair blow off some steam and rise a bit to clear oversold levels. I will look to fade these rallies if they occur near resistance, with the nearest zone around 1.4165 support. The 23.6% fibonacci at 1.4185 from the Jan 13-Jan 21 fall should provide downward pressure and limit rallies in this area.
Trading Idea: My primary trade is to look to fade rallies in the 1.4165 area, with short targets at 1.4135, 1.4105 and 1.4065. Secondary trade is to sell a sustained break of 1.4055.