Thursday, April 22, 2010

Euro Targets Update

From Nov.26, Where Is the Euro" Long term the Euro topped out  July08 at 1.6038 and moved down in 5 waves to 1.2329 a year ago October .  That .3709 long term move down  is retraced .78 at 1.5222.
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."
And from Mar.24, commenting on the above, "That day the Euro high was 1.5145.
Today the Euro has decisively taken out 1.34 , the .618 retrace of the the entire B wave up from 1.2323 to 1.5145.
The next  Fibonacci retrace point providing potential for a pivot is the .76 at 1.2995.
Note that is just over the 1.2856  minimum target for this C wave down."
 click to sharpen
The weekly bar has a 5 wave structure down from 1.514, and it appears we are in the 5.

So where are we now? The recent abc structure up on the Euro was likely a 2 or b as labeled, of the 5th  and the old low of 1.3270 is about to be challenged.

The  5 =1 at 1.29. Note the support of 1.2856 and 1.2995 in above.
So there is a pretty significant cluster of support around 1.29/1.30.
So will that be it? Could be either a complete C down or potentially the first leg of C down.

The Euro bottomed in 2000 at .8229 following its debut. It then rallied for 8 years into the 1.6038 high.
The .382 retrace of that is at 1.3030. The 50%  retrace is at 1.2138, and the .618 is at 1.12.

My guess is that THIS ABC stucture down will carry to at LEAST the 50% (or 1.21). I don't see any reason for the ABC structure to be unusually quick or shallow. And even if you were thinking that the .82 to 1.60 move was structured in 5 waves, what would  be the 4th of lesser degree was at 1.16 : a likely target for a pullback. 
So the support at 1.30/1.29 will likely produce a decent bounce, esp. given the short open interest. And it needs careful watching for structural clues to it's nature...is it corrective or impulse wave like? Long term reversal or serious bounce?
Of course if the Euro blows through the 1.29 area it would be extremely negative.

 

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