Looking at the monthly chart, obviously the uptrend is intact. As long as this is true, there are potential price targets up to the 1.03 zone as well as beyond. For example, the double bottom on the daily chart (.9804 and .9833 from January) had a target of 1.0350. A bull flag on a daily chart had a target of 1.0378. There were other daily patterns with additional price targets above 1.03.
Just as obviously, the rate of ascent since June of last year is very steep. It's unlikely the pair can maintain this angle. If you look back on the chart, I've drawn lines where ascents were sharp and one can see the resulting correction. The pair has been stalling since the December high of 1.0257. A .382 retracement from the rise from .8065 to 1.0257 would be .9420; a 50% retracement would be .9162. Those numbers seem rather far away right now but are certainly within the realm of possibility. It was only in December that there was a low of .9537. It's notable that all through the rise from .6007, momentum as represented by RSI has never risen above 70, which would be overbought. In fact, RSI has not been above 70 since October 2007 when the high was .9347.
One could look at this as an expanded flat with the A to B leg ending at 1.0257. That would certainly make for a jolly set of bears as C began but there needs to be more evidence for this. Frankly, at this point, I don't see Elliott Wave Theory as being particularly useful on this chart.
Monthly support is at 1.0095, .9916 (Feb. low), .9804, .9710 (monthly 10 EMA), .9537, .9420 and .9162. Monthly resistance is, yes, you guessed it, 1.0257. After that is 1.0300, 1.0350, 1.0435/79, and 1.0500.
Here’s the monthly chart:
© Dianne Fecteau, 2011. 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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