View in eur/$ over the last few months of an extended period of ranging with a slight upward bias, remains in place. Still appear to be forming a large rising wedge since June, seen as a topping pattern that resolves sharply lower. However, these patterns break down into 5 legs, leaving open scope for another few weeks of wide ranging within the pattern first (see “ideal” scenario in red on daily chart below). Note too, time cycles in a number of other financial markets are pointing to a potentially important reversal on the late Sept/early Oct timeframe, and adds weight to the view of another few weeks of ranging in eur/$ before resolving sharply lower. Currently, the market is chopping near the ceiling of the potential rising wedge and if more aggressive (no signs of a short term top pattern-wise yet), is seen as a good area to short. So for now, would sell here (currently at 1.4490) for the month long bullish trendline (currently at 1.4160/70), the base of the wedge (currently at 1.4075/852) and eventually below.
Initially stop on a close above the ceiling of the possible wedge (cur at 1.4105/25, a good risk/reward) as it could trigger a further up acceleration. Nearby support is at 1.4400/10.
Longer term no change in the long held view of an extended period of wide chopping within the roughly 1.23/1.48 range. Last March with the market just above the Oct low at 1.2335 (base), said that gains all the way back toward the top of the range at 1.4715 was favored, and the market has indeed rallied since. Switched the longer term bias to the bullish side on the May break above the bear t-line from Dec (then at 1.3350). However, the market appears to be in the process of forming a multi-month top (see shorter term above) within the final upleg from the March low at 1.2460 (wave v), and suggests that risk is rising for at least a 3-4 months of correcting lower and minimum 8-9 big figure pullback. Though there are still no firm signs that a top of that magnitude is in place, the bigger picture risk/reward has shifted away from the position, so would switch the longer term bias to neutral.
