The Euro exceeded 1.2775 (.382 retracement level of the move from 1.1892 to 1.3335) and also overtook the previous 1.2779 high. So far this morning it has reached 1.2846. So the possibility at least exists for it to continue up with resistance at 1.2900/25, and 1.3080.
I am looking to short rallies but the question is where to enter. If you assume that an A wave correction began at 1.2588 and ran to 1.2779 and the B wave dropped to 1.2626 then 1.2817 is the target if A=C and 1.2935 is the target if C is 1.618 times A. The 20 daily SMA is at 1.2846. The area between 1.2833 and 1.2922 (Aug. 20th and 18th highs) is polarity. On the hourly chart, RSI is already overbought. However people establishing positions at the beginning of the month could account for this. In any case, I'm watching price and momentum carefully and will likely short before or near 1.2900.
Should Euro begin to fall, support is at 1.2779, 1.2663, 1.2626, and 1.2588.
Here's the one 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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