EUR/USD Breaks Range

The EUR/USD finally broke out of its range last night (8 p.m. EST) mid Tokyo morning as several big Model Funds and Investment Banks began liquidating their long positions fueled by rumors of China’s economy beginning to slow down. The sell offs are continuing to occur as I write this but I have already closed my position due to the oversold and over extended state of this currency pair combined with the upcoming Core CPI at 8:30 which might send this pair back up for a decent retracement. I don’t expect this to be the rebirth of the massive sell-off that everyone is waiting for, but it could very well continue down further to the upper 1.4200′s. It’s a good idea to wait for the US data to come out before reassessing the situation for another short or a long if it retraces.