The Euro fell during the trading session on Tuesday, reaching towards 1.1650 level. That’s an area that is supportive, as we have seen buyers jump into this market more than once. I think that if we see a bit of a bounce from here, it should be a continuation of the consolidation that we have been in. Regardless, the weekly chart formed a massive hammer, and that suggests to me that we are going to find buyers given enough time. If we can break out above the 1.1750 level, the market should continue to go much higher, but at this point I think that buying the dips will probably be the best way going forward, unless of course the Italian situation gets worse. At this point, I think that if we get some type of stability coming out of Rome, it will only be a matter time before we rally.
The US dollar is a bit overbought, so the bounce made a lot of sense. I think we could rally from here, but I don’t think it’s good to be easy. Quite frankly, this is a market that continues to see a lot of noise, but I think that in general we will continue to see multiple opportunities as the market jumps around. The 1.15 level of course was crucial, and it did hold quite nicely. The question now is whether we can continue this bounce. If we were to break down below the 1.15 level, look out below.