The Euro is poised to go lower from current levels
The only questions is when do we offer to our readers two types of trades - one for tonight's expiry and one for tomorrow. Both should be relatively safe with the accuracy rate on this forecast standing at 80%. We only need to get to a desired level that provides us with an appropriate opportunity.
In out view, the desired level that would trigger a continuation in the direction lower for the Euro is the daily low from Monday, which has been breached during the trading day earlier - 1.3815. We are betting that daily puts at that level today the 29th and tomorrow the 30th will bring nice profits.
As the markets have opened in Asia today we have seen the Euro price rally throughout the session to get as high as 1.3880 just as London opened. However that momentum has stalled and prices have dropped slowly initially only to accelerate sharply into the close of European trading in the aftermath of lower than expected German CPI figures.
The levels from yesterday which acted as strong support have been reached and breached as the EUR/USD binary options forex pair has hit 1.3805. After the test to the downside failed dismal New York trading has taken over to lead to current levels around 1.3810.
In our view the main support currently is around 1.3800 - the round figure needs to be broken in order for the next move to materialize. That looks close now, but we are wiring for one last rebound to previous support levels at 1.3815 to buy our daily puts there.
Since the calendar is quite busy tomorrow, we would definitely start from today - no major releases are scheduled until the expiration of the daily option, while tomorrow we will get the Euro Zone CPI, which could surprise to the downside after today's dismal number from Germany.
We would only reverse and double our call to the upside if we see a breach back above 1.3850. In that case the likelihood of a protracted move to the upside is reignited and we would be certainly marking daily calls for tomorrow's expiry. In the mean time, stay with daily put options if we see 1.3815.