In the Feb 4th email on eur/$, warned that a potentially important bottom was in place (or at least close) as the market continued to form a large falling-wedge type pattern (generally resolve sharply higher) since Dec. Today, the market has broken above the ceiling of the pattern (currently at 1.2930, bought on intra-day break above from the Feb 4th email), and greatly increases the likelihood that an important bottom (for at least the next few weeks and potentially longer) is in place (see longer term below), and with potential a further upside acceleration ahead. Note too the new buy signal on the daily macd (see bottom of daily chart below) adds weight to this bullish view. Upside resistance is seen at 1.3320/30 (late Jan highs), 1.3460/70 (38% retracement from the Dec high at 1.4715), and with eventual gains to the Dec high at 1.4715 in the bigger picture (see longer term below). For now, would use a wide stop on a close below the week long bullish trendline (currently at 1.2740/50) as there is some chance for a deep retracement first (though not currently favored).
Longer term, no change over the last few months as the market is seen within an extended period of wide ranging (likely for at least another few months, see “ideal” scenario in red on weekly chart below), and as the market settles down/consolidates after the large moves over the last few years (a common occurrence). In general for the longer term, would continue to fade the extremes of the wide range, or can trade the shorter term view (see above) as the moves within this larger range are/will continue to be substantial and tradable.
