4:23a GMT - Covered short from yesterday at break-even after it did nothing for the majority of the day. We've seen some bullish pressure in the past few days, though that is to be expected with the extremely bearish moves we've had lately. The EUR/USD needs to cool off some oversold levels to clear room for another stab downward.
Daily Outlook: 1.3925 and 1.3880 should provide some support for those looking for longs, though I will sit back and wait for a better short to develop a bit further up. Overall we are still in a very bearish primary trend (pull up a daily chart and look where we were in early December - we've dropped over 1000 pips!) which means big money has been pushing the pair down for a month now and will continue to support dollar rallies in the future. 1.4030 is the 50% retracement of the 1/25-1/31 drop, the 23.6% retracement of the larger 1/13-1/31 drop and was strong support on 1/20 so this area should give us some solid resistance. If nothing else its break will signal a larger move to the upside.
Trading Idea: Primary trade is to look to sell in the area of 1.4030 resistance (see significance above), preferably on candlestick signal. Short targets from 1.4030 are 1.4000, 1.3960, 1.3925 and 1.3890. Very short term traders might look for long opportunities in the 1.3925 and 1.3885 areas though I would consider this a riskier trade.