It looks as though the United States still cannot decide on stimulus, so that could bring a little bit of bullish pressure into the US dollar in general. Furthermore, we have to pay attention to what is going on in Europe, and it is not necessarily good.

We are starting to see deflation enter the European Union, and central banks will more than likely put the thumb on the scales in order to devalue the common currency. With this, it is likely that we will see this market go looking towards the 50-day EMA over the next couple of days, especially if we continue to see a lack of stimulus in the United States.

The uptrend line had offered quite a bit of support previously, but now we have tested it a couple of times and it looks as though that uptrend line is holding up as resistance. Furthermore, the 1.19 level above seems to be signalling massive resistance and there is a clear zone of selling between the 1.19 and 1.20 levels. In other words, we are struggling to break out.

At this point I think it continues to prove to be a very noisy market, but that is nothing new for the Euro. The size of the candlestick is not necessarily overwhelming, but it does wipe out the candlestick from the previous session. That is essentially a “48-hour shooting star," showing signs of an overbought condition or perhaps even exhaustion.

I think that the 1.17 level will offer support, but if we break down below there, it is likely that the market will go looking towards the 1.16 level after that. Granted, we could get a headline coming out the United States about stimulus that could cause this market to rally, but I think this would be short-lived at best.

In fact, I am more than willing to jump all over this and start selling if we get close to the 1.19 level, as it has been so important. I believe that the next couple of days will probably be negative, so in that situation, I do think that the sellers are going to take over, at least for the short term. If we do not get stimulus and things break down a bit in the United States, we could see an acceleration to the downside.

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