Euro breaks out slightly during Monday session

The Euro rose during the session on Monday, breaking above the 1.17 level. We have pulled back a little bit from there, but I think there is plenty of support underneath, especially considering that we formed such a strong hammer on the weekly chart. I think that the Euro is oversold regardless, so it’s only a matter of time before we get a bit of a “dead cat bounce”, continuing the move that we had seen late last week.

If we can get some time of reconciliation in Italy, that will probably lift this market quite sharply as well, but I do think that there are major problems longer-term for the European Union. With that in mind, it’s likely that we will continue to see a lot of volatility, and I do think that eventually we selloff. However, we had gotten far ahead of ourselves, and I think a bounce is overdue. The 1.15 level underneath is a bit of a “floor” in the longer-term charts, as it coincides nicely with previous resistance on the weekly chart. Overall, I think that value hunters are starting to appear, and the clustering that we had seen on both Thursday and Friday tells me that there is a certain amount of interest in going long. Beyond that, the jobs number coming out of the United States that was so strong could not let the US dollar, so that tells me that perhaps there aren’t that many people left to buy the greenback.