EUR/USD Technical Analysis – January 16 2015

The EUR/USD pair broke down during the session on Thursday, as we have now cleared quite a bit of support. With that being the case, this market looks like it’s set to continue going lower and possibly much lower considering the fact that we are now slicing through pretty significant support based upon monthly charts. However, a bit of caution is probably still going to be needed simply because this is somewhat of an artificial move.

The Swiss National Bank has decided to lift the peg that once held firmly in the EUR/CHF pair, at the 1.20 level. Because of this, there has been a bit of chaos in the currency markets today, especially when it involves the EUR or the CHF. With that being the case, I am bearish of the euro, but I am a bit hesitant to just jump all in at this point.

I believe that perhaps bounces could be used to sell the EUR/USD pair, and then probably fairly small increments. We will have to see what the next 24 or even 48 hours of trading brings, because there are a lot of moving parts, and one has to believe that in some of the CHF related pairs, there’s going to be one hell of a bounce. Once that happens, a rapid ascension of the EUR/CHF pair could have a bit of a “knock on effect” in this pair. Is because of that that I would be cautious because these are the type of moves that happened very infrequently, and end up costing people their jobs.

I still believe that we can break above the 1.20 level, that would be massively bullish for this pair, but obviously that is a longer-term call at this point. Surprisingly enough, it appears of the downtrend is going to continue, but it won’t necessarily be the easiest move to deal with at times. I believe that the longer-term move is probably going to be to the 1.15 level, and then possibly even as low as the 1.10 level.