EURUSD—B wave

I was expecting this pair to drop a bit more, possibly down to the 1.2130 level before it rallies but it may not happen. Euro put in a low of 1.2177 this morning with a couple of candles with longish lower shadows on the hourly chart. Their length suggests that the pair was rejecting lower prices. It then bounced, up to 1.2218 but is floundering a bit, in part because it's hitting its head on a Fib confluence zone. Sentiment is still bearish. The price on the 3-hour chart looks as though it's in the process of completing a B wave in what may be an ABC correction. It's unclear, though, that B is over.

My intent was to try a small long at 1.2120/30 but we'll have to see if it happens. One negative note—on the weekly chart, Euro closed last week with a doji star. After an ascent, one wants to watch this week's candle since, if it cuts deeply into the ascending candle from the week before, it will complete an evening star pattern.

Here's the three-hour chart:
















© Dianne Fecteau, 2010. No part of this material may be reproduced in any form, or referred to in any other publication, without the express written permission of the author.

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