The Euro finally got moving after spending some time consolidating yesterday. It went without me as my buy order wasn’t hit. The high so far this morning has been 1.3092.
There are a few price targets to keep in mind. If this in fact is an Elliott Wave ABC correction from the 1.1876 low, then 1.618 the length of A would bring price to 1.3108. That’s also close to the .382 retracement of the move down from last November. We’re very close and if this isn’t the end of wave C expect expect some faltering as sellers come in. Occasionally, Wave C is 2.168 times that of A (convenient isn’t it how the theory expands to accommodate price action) and that would bring it to 1.3433. As I wrote a week or so ago when I discussed price targets, that also brings it into line with the inverted head and shoulders price target. So there is still possibility for movement in both directions. If you’re bearish, you’d try a short near the 1.3108/40 area with a tight stop. I’d want to see momentum on the short-term charts before doing so and since I’m at my conference again today I may not get a chance to do so. There is some negative divergence on the three-hour chart but this is typical during the end of moves.
If the pair robustly achieves and clears 1.3150, I think there is a possibility for the 1.34 area. It’s also worth noting that the most recently closed three-hour candle (8 AM EST) broke above a speed line. One could buy a pullback to 1.3050 but the stop would have to be fairly wide (below 1.2950).
I hate to be a pill but if you look at a daily chart (not shown), you could make an argument for being in an overall impulsive wave at this point. I’m not trading with that in mind but it’s something to be aware of—some people are.
Support is at 1.3050, 1.2950/30, 1.2875, 1.2840, 1.2794, 1.2733, 1.2683 and 1.2523. Resistance is at 1.3108, 1.3150, 1.3240, 1.3300, and 1.3430.
Here’s a 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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