The EURUSD pair fell during the session on Monday, gapping lower as ECB members suggested that perhaps more monetary stimulus could come into play as the Euro is overvalued in their opinion.

With that, we may end up having a nice selling opportunity long-term, but we will have to wait to see what the market does. The fact that we did in fact gap lower though does bode well for the sellers at this point, and it appears that the longer-term downtrend line off of the monthly chart is still in effect. As long as we don’t break above there, there is always going to be the opportunity for this pair to sell off.

On the other hand, we see plenty of support just below current levels, so it is difficult to sell unless you have true conviction. We don’t have enough here for that, as the market really has a completely convinced this, although be negative, it didn’t fall apart like we would have wanted to see.

Because of that, we think that given enough time the market will have to show it’s true intentions, but right now we still have the question them.

If we can get above the 1.40 handle, we believe that this market becomes a longer-term buy-and-hold type of situation. With that, we believe that the market would finally show itself to be overly bullish, and we would be more than willing to buy every time the market pulls back. Between now and then, it is going to be difficult.

We believe that the market will continue to be a short-term trader’s type of market, and until we get some type of significant move in one direction or the other, that’s probably going to continue to be the norm. It’s been a difficult market to trade for some time now, even though you can definitely see that we have had moved lately, but they all look very choppy and difficult.

We don’t think that is going to change anytime soon, so we are still cautious either way.

Editor’s Note: Equity investors/traders can use the Currency Shares Euro Trust (FXE, quote) ETF to take positions in the euro without a FOREX account.  The ETF looks to track the price of the euro, minus ETF fee. The fund seeks to reflect the price of the euro with the shares representing a cost-effective investment relative to investing in the FOREX market.

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