Fri Feb 10 Thu Feb 9 Wed Feb 8 Tue Feb 7
1.3290/1.3155 1.3320/1.3213 1.3287/1.3220 1.3269/1.3088

Pivots: S3: 1.3019; S2: 1.3082; S1: 1.3145; P: 1.3217; R1: 1.3280; R2: 1.3353; R3: 1.3425
EUR/USD: Over the last week, the EUR/USD traded north from a low of 1.3027 on Monday, February 6th to a high of 1.3320 on Thursday, February 9th. This occurred after the noted sideways consolidation that looked very much like a triangle continuation pattern, resolved itself in a thrust out of the triangle in the direction of the current trend which was up.This thrust out of the triangle fell short of the 1.3350 to 1.3400 target by 30 pips but the direction was right. On the fundamental side of things, the unpredictable Greek situation in light of a few upcoming austerity measure votes, should have caused risk markets to continue to gain momentum. In fact, the markets have lost momentum as illustrated by Friday’s selloff in stocks and the EUR/USD. Friday could have been position squaring ahead of the weekend or a reversal in risk trends. We don’t know yet but this week should be interesting. We have changed the count slightly on the charts to one where we see a correction from this level which could be followed by another move higher. That depends on how the move down plays out, and whether it is corrective in nature or impulsive. It also depends on how the market digests the Greek news this week which will affect the EUR/USD. For initial support, we will look towards the previous 4th wave in the vicinity of 1.3050, which is also 38.2% of the last swing move higher from 1.2627 to 1.3320. From current levels, look for a corrective move up without going above 1.3320 for a potential sell. Stops have to be placed above the highs at 1.3320. Once we hit the 1.3050 level, it remains to be seen if we break below 1.3000 followed by 1.2930 and 1.2880 or trade higher once again. A move above 1.3320 will see higher levels. Watch support and resistance levels, including Fibonacci and Pivot Points.

EUR/USD Current Price: 1.3090 Daily High/Lows:

Fri Feb 3 Thu Feb 2 Wed Feb 1 Tue Jan 31
1.3205/1.3065 1.3196/1.3084 1.3218/1.3025 1.3212/1.3045

Pivots: S3: 1.2926; S2: 1.2998; S1: 1.3071; P: 1.3138; R1: 1.3210; R2: 1.3277; R3: 1.3344

EUR/USD: Over the last week, the EUR/USD has been sidelined, trading in a range between 1.3025 and 1.3225. The trading range environment put a halt to the upward momentum the EUR/USD had the preceding two weeks. This sideways consolidation looks very much like a triangle continuation pattern, which typically resolves itself in a thrust out of the triangle in the direction of the current trend. Since the current trend is up, a thrust out of this triangle could occur this week and would put the EUR/USD at higher than current levels before turning back down again. A move up would complete the wave iv abc pattern that is playing out seen on the 4-hour chart. If we measure the height of the triangle at 200 pips, that would project a move up for the EUR/USD to approximately 1.3350 to 1.3400. Looking at the FIBO targets, the 38.2% FIBO retracement from the high of 1.4245 on October 27, 2011 to the low of 1.2627 on January 16, 2012 brings us to 1.3248 followed by the 50% retracement at 1.3440. The triangle target would coincide with a FIBO move of between 38.2% and 50%. On the downside, watch S1 at 1.3071 and the supporting trend line which now comes in at about 1.3050. That level remains key support, and if broken, the 1.2930 will garner support followed by 1.2880. Day trading is still in order, rather than taking a strong view at this time on the daily charts.

The EURO Pairs Rebound Jan 22, 2012
EUR/USD Current Price: 1.2930 Daily High/Lows:
Fri Jan 20 Thu Jan 19 Wed Jan 18 Tue Jan 17
1.2985/1.2886 1.2970/1.2838 1.2867/1.2733 1.2808/1.2648

Pivots: S3: 1.2706; S2: 1.2793; S1: 1.2879; P: 1.2925; R1: 1.3011; R2: 1.3056; R3: 1.3102

EUR/USD: The EUR/USD made a new low by only 4 pips at the start of the week on Monday, January 16, 2012 before the major correction started. The aforementioned targets between 1.2500 and 1.2650 were met and staunchly held. The EUR/USD wasn’t even able to test the 1.2500 big figure before reversing. Last week we noted that 1.3076 was the key level to watch and it still stands, as a move above that level will mean more than a 100% correction of the last swing move, which would almost signal a change in the major trend. Therefore, shorts held against that level on the daily chart are still in order. Now that we’ve had such a major correction, I’d like to highlight some of the EURO pairs which might provide direction for the coming week. The EUR/GBP and EUR/JPY are in sync with the EUR/USD, as all three pairs have corrected the last swing move by 38.2%, with the EUR/USD and the EUR/JPY meeting psychological resistance at 1.3000 and 100 respectively. The commodity pairs, namely the EUR/CAD and the EUR/AUD, however, have only corrected the last swing move by 23.6%. They also lagged by one day, meaning that the other Euro pairs started the rebound a day earlier than the commodity pairs. In fact, of all the pairs, the EUR/GBP and the EUR/AUD gave back half of the gains made by the end of the week, signifying weakness. The EUR/CHF attempted the 23.6% area but closed the week at the market lows. While it is not clear if this consolidation is completely over yet, we have not violated the downtrend in any of these pairs and the sustainability of the Euro rebound is suspect. With these Euro pairs, continue to monitor the Fibonacci resistance levels for a move above the 23.6% will target the 38.2% and a move above the 38.2% will target the 50%. In the case of the EUR/USD, the 1.3076 level is key, and that also happens to be close to the 50% FIBO level.

EUR/USD Current Price: 1.2720 Daily High/Lows:
Fri Jan 6 Thu Jan 5 Wed Jan 4 Tue Jan 3
1.2811/1.2698 1.2945/1.2771 1.3072/1.2897 1.3076/1.2931

Pivots: S3: 1.2596; S2: 1.2660; S1: 1.2723; P: 1.2834; R1: 1.2898; R2: 1.3008; R3: 1.3119

EUR/USD: The EUR/USD had a major drop since last week (1.2958 to a low of 1.2698 on Jan 6th) in light of Europe’s unresolved sovereign debt crisis and Friday’s strong US Non-farm Payrolls. The EUR/USD has been trending down since the high swing of 1.4245 on October 27, 2011. Since last week’s low of 1.2857, the pair corrected up to 1.3076 earlier this week before resuming its downtrend. Now, 1.3076 is the key level to watch, as a move above, will temporarily halt the daily downtrend and a larger correction will take place. Moving down to the hourly chart, price should stay below 1.2811 for further downward price action. A move above that level will correct the move starting from 1.3076 to the current lows. Use your Fibonacci tool to calculate such a correction. Orange wave (3) extension targets include: 127% at 1.2644; 138% at 1.2606; and 162% at 1.2526. Black wave iii extension targets include: 138% at 1.2652 and 162% at 1.2500. Therefore, it is highly likely that we will see a major correction once in the target zone between 1.2500 and 1.2650. Also recall further support resulting from the Aug 2010 low at 1.2586. The theme to sell the rallies is still in order, with caution, since we are close to some major targets. On the daily time frame, our initial stop loss would be at the 1.3076 level, so selling close to that level is advisable. Sells taken on shorter time frames should use 1.2811 as the stop loss area. Expect consolidation once price trades above that level. Moving down to the hourly time frame and assuming we reach the average target of 1.2600, expect a retracement on the last swing move from 1.3076 to 1.2600(?) to the following levels: 38.2% at 1.2783; 50% at 1.2839; and 61.8% at 1.2895.

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EUR/USD Current Price: 1.2958     Daily High/Lows:

Fri Dec 30                 Thu Dec 29               Wed Dec 28             Tue Dec 27

1.2998/1.2903       1.2963/1.2857       1.3079/1.2911       1.3082/1.3042

Pivots: S3: 1.2751; S2: 1.2821; S1: 1.2890; P: 1.2926; R1: 1.2996; R2: 1.3032; R3: 1.3069

EUR/USD: The EUR/USD has been trending down since the high swing of 1.4245 on October 27, 2011 amidst the European debt crisis, which is still unresolved.  Alas, the EUR/USD hit a temporary bottom on December 29, 2011 at 1.2857, with a hammer reversal candlestick pattern which subsequently took the pair up to a corrective high of 1.2998.  The most recent swing high of 1.3197 must remain in force for the EUR/USD to continue its move down, for if that level is breached, a more extended correction will take place. Wave 3 extension targets include: 100% at 1.2848 (target met); 127% at 1.2466; 138% at 1.2309; and 162% at 1.1977. Further support will result from previous lows of 1.2873 (Jan 2011), 1.2586 (Aug 2010), and 1.1879 (Jun 2010). The theme to sell the rallies is in order for the start of 2012. Since the trend is established, as traders we need to catch a slice of the move. Since we are in oversold territory, the best time to sell is after price retraces. In other words, we want to continue to sell on strength with reasonable stops. On the daily time frame, our initial stop loss will be at the 1.3197 level, so selling close to that level is advisable. The other option is to move to a smaller time frame to look for sells with tighter stops.

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EUR/USD Current Price: 1.3293     Daily High/Lows:

Pivots: S3 1.2952; S2 1.3027; S1 1.3102; P 1.3242; R1 1.3313; R2 1.3457; R3 1.3597

EUR/USD: The EUR/USD has been trending down, hitting a low point of 1.3167 from the initial swing high of 1.4551, and the last swing high of 1.3691 on Sep 28, 2011. These swing moves are tremendous and all we need to do as traders is to catch a slice of the pie. Since we are selling in a downtrend, the best time to sell is after price retraces. In other words, we want to sell on strength. One way to do this is to use Bollinger bands on the 4 hour chart, and sell near the upper Bollinger band in a downtrend. When price retraces to the Bollinger band, and is confirmed by an overbought situation of your choice in oscillator, that provides a double confirmation for a sell. If the angle is steep, sometimes price retraces to the 20 period moving average (the middle line of the Bollinger band) and doesn’t make it to the upper band. (See left chart.)

What kind of profit targets are we looking for? If we look on the weekly chart in the figure on the right, we can calculate a projection based on the initial move down from 1.4941 to 1.3969. the 100 percent projection from the 1.4551 level is 1.3579, which we have surpassed. 161.8%, which is the next projection level below the recent low, brings us to 1.2978. This is also significant as 1.3000 is a major big number, and S2 and S3 straddle these levels. Therefore, 1.2952 – 1.3027 should provide a major window of support for the EUR/USD.

Pivots:S3 1.3470; S2 1.3606; S1 1.3742; P 1.3840; R1 1.3976; R2 1.4074; R3 1.4171

EUR/USD: The EUR/USD finally broke down, hitting a low point of 1.3495 from the initial swing high of 1.4551, trend line break at 1.4300 and confirmation break at 1.4000. It is still worth comparing the EUR/USD price action with that of the Euro commodity crosses, the EUR/CAD and EUR/AUD. We noted that these crosses typically “lead” the price action on the EUR/USD, so keeping an eye on these crosses is a good idea. For example, if those crosses are trending down, as they did the past two weeks, the EUR/USD will likely trade down as well. When these crosses are correcting up, as they did the last few trading days, it is difficult to sell the EUR/USD successfully. This week, the EUR/USD and EUR/AUD bottomed on the same day, registering a low of 1.3495 and 1.2987 respectively. The EUR/CAD edged out a lower low, given the inherent strength of the CAD. So, what happens now? The EUR/USD corrected 38.2% of the drop, as did the EUR/AUD, with the EUR/CAD at the 23.6% mark. A continued move higher suggests a deeper correction to the 50% retracement level is likely. For a resumption of the downtrend, watch for a break in the EUR/USD below 1.3704 and a break below 1.3358 in the EUR/AUD. If we break down below these levels, it is quite possible that the downtrends will resume. If not, then we have a greater correction in store for these pairs.