The Euro is still under pressure since the start of 2014
The single European currency is experiencing some difficulties to maintain its steady gains realized during the course of 2013. The EUR/USD pair is consolidating its losses from the past couple of days and in our view we will see a lower close by tomorrow's close.
With the bank stress tests by the ECB coming ever closer, commercial banks are hoarding liquidity and the private sector is stifled by loads of public borrowing. As you will see on our chart long term strength might be turning just about now.
Let's have a look at our chart - the Euro currency rebounded today to levels in the mid 1.36's but following the start of the US session underlying bullishness has dissipated. The EUR/USD binary options forex pair has marked a double top around 1.3650-5 and for now looks rather bearish.
We would be buying put options for tomorrow's daily close. At this point in time we are fairly confident that while trading remains below 1.3660 further downside is open and quite possible. German data today was very positive, however backward looking.
In an alternative scenario and to retain caution we would be buying hourly calls on a sustained break above 1.3660. The main risk to the outlook for the pair is the ECB press conference at 13:30 GMT on Thursday and the US non-farm payrolls on Friday.
Unless Mr. Mario Draghi comes up with some very good news (we wonder at this point in time what could they even be!?) the pair will most likely drop towards 1.35 in the coming sessions. Stay tuned to our forecasts for the latest developments surrounding the EUR/USD pair.
Meanwhile to sum up we issue our call to buy puts at current levels for daily expiration for tomorrow, the 8th of January 2014. If we see an unlikely break above 1.3660 we favor buying calls on an hourly basis.
Happy trading and stay tuned to Binary Options Post for the latest forecasts!