While the Euro did break above resistance as I blogged about yesterday, there are some signs of weakness popping up. It did not close yesterday above 1.3457. The break above could turn out to be a fake-out.
First thing to remember is that the pair is in a downtrend—only a break above the November high of 1.4282 would bring a little optimism into the picture.
Second thing is what I blogged about yesterday—Euro has all the chartacteristics of an Elliott Wave expanded flat wave c. Looking at the three-hour chart below, one could make a case that the fifth wave of circle c is completing. If so, the next move is down. Howver, it could also get significantly higher before it turns down so one must be cautious.
On the chart below, one also sees the RSI failure swings I mentioned yesterday. This, too, is bearish.
About the only thing that's positive is the bull flag on the three-hour chart which I've drawn in green on the chart below. That would be invalidated with a close below 1.3400. However, until it is, upside targets remain at 1.3842 with fib and polarity resistance at 1.3887.
A break below 1.3290 would be bearish with support at 1.3244, 1.3000, 1.2969, and 1.2850.
I'm short from 1.3480 but I've moved the stop to breakeven.
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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