Tuesday, January 19, 2010

Euro at Risk

For the better part of a month the Euro has been parked between 1.4257 and 1.4578. That appears to be about to change. The choppy sideways action is a classic abc consolidation of the sharp drop from 1.5140 to 1.4215. retracing .39 of that move. A very common and relatively modest retrace.

Mar Euro


Since making the 1.4578 high , labeled "C" in the above chart, the Euro has come off in a move that has impulse wave characteristics and will likely end up counting as 5 waves. There is a good possibility that it takes out the 1.4258 point ..the termination of the B wave, and for most purposes the bottom of the month long range.
Below is the monthly continuation chart to put all that in context.

click to enlarge
A break below 1.4250 following the recent consolidation, can easily be interpretted as the beginning of a 3rd wave down of a C wave of larger degree. The C could eventually carry the Euro to new lows under1.23. See  
Where Is the Euro       published Nov.26 2009
"A failure by the Euro from here projects to a minimum 1.2856 as C=.618 f A. And of course the C=A at 1.1435."

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