Comment: The sell-off in the first half of 2010 was much greater than anything we had allowed for and seriously tested our nerves. Nevertheless it did hold against long term 50% Fibonacci retracement support and the level at which the Euro kicked off in 1999. It has subsequently spent the rest of the year consolidating under one standard deviation above the long term mean, all price action from the record high seen as a complex Wave IV ‘flag’ formation. Lacking momentum and with subdued implied volatility it is likely to hold between 1.2000 and 1.4000 for most of this year. Late in Q4 2011 expect a squeeze up to 1.4950.

A monthly close below 1.1700 would probably send it tumbling to parity.