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in the eur/$ remains unchanged, as the Aug 6th high at 1.3335 high completed the 5 wave rally from the
June 7th low at 1.1880 (see numbering on daily chart below). Though this suggests
an eventual resumption of
the longer term gains, at least another few weeks of ranging/correcting lower
is likely first. Note too that the daily macd remains in sell
mode (see bottom of daily chart below), while the nearer term downside pattern
is not "complete", and with both
adding to view of at least some further downside ahead. Currently, the market is heavy after the
earlier break below the bullish trendline from June at 1.2775 as well as last
week 's low at 1.2735, on way toward 1.2605/15 (50% from the June low at
1.1880) next. For now, want to be short
and would sell here (currently at 1.2710).
However, further downside may be a period of ranging lower so will want
to use an aggressive trailing stop on a close above the multi-week bearish
trendline (currently at 1.2845/60).
Longer
term, also no
change as the market is seen completing an important bottom in June at 1.1880,
with eventual gains toward 1.3450/75 (38% from the July 2008 high at 1.6035),
1.3940/65, and even the bearish trendline from that high (currently at
1.4700/25) still favored over the next number of months. However as been warning, risk was rising for
at least a few weeks/month of correcting lower along the bigger picture way
higher, and we are currently within that pullback/correction (see
"ideal" scenario in red on weekly chart/2nd chart below). Switched the longer term bias to neutral on
May 25th at 1.2260 (from bearish that was put in place on Nov 2nd at
1.4825). For now, would maintain that
neutral bias, but with the expectation of switching to the bullish side a few
weeks ahead (on better signs that the correction from 1.3335 is
"complete").
