No change in the bigger picture view in eur/$ as trade from the April high at 1.6015 is seen as a large correction, with eventual new highs above 1.6015 after. May be forming a pennant/triangle, generally seen as continuation pattern that resolves sharply higher, and adds weight the view of eventual new highs above 1.0615. Note too that volatile trade within these patterns is common (as been seen since April). However, these pennants break down into 5 legs and suggests more ranging within the pattern first (see “ideal” scenario in red on daily chart below). Overall, would fade the extremes of the pattern (currently ceiling 1.5760/75, base at 1.5360/75), but with the expectation of an eventual upside resolution. With the market currently approaching the ceiling, would short here (cur at 1.5745), stopping on a close above 1.5800, but trailing it aggressively lower with the market. Nearby support is seen at 1.5665/75 while resistance above the ceiling of the possible pennant is seen at 1.5815 (late May high).
Longer term, the long held bullish bias remains in place at the market is chopping within the final upleg in the rally from the June 2007 low at 1.3265 (wave V, see numbering on weekly chart/2nd chart below). However, this final upleg (which began at the Dec low at 1.4315) is not yet “complete” with gains above the April high at 1.6015 still needed (see shorter term). For now, maintain the long held, longer term bullish bias but will start to look for signs of a more important top (for a minimum 3-6 months and likely longer) on gains above 1.6015.
