Monday, January 25, 2010

Euro Update


click to enlarge
The choppy sideways consolidation in the Euro looks complete and like it's about to resume the downtrend, as it overlaps previous days lows.
Odds of the next leg down being a -3- of 3  are HIGH, as the recent consolidation,  the -2- wave,  is certainly the biggest in price and time since Jan. 13.
Take a look at the weekly continuation chart for the implications of that count.

click to sharpen
First of all new lows here will take out the support provided by the .382 retrace of the whole move up. The 50% retrace is at 1.3740, note the important horizontal support. It is not uncommon for a 3 wave to be a Fib multiple of the 1st wave, so 1.618 targets 1.2919. Even if this next leg equals just the most recent move from Jan 13, it takes out 1.3740.

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