Thursday, April 15, 2010

Euro's got the blues.

EUR/USD declined again overnight, keepoing the bearish short term counts I have been showing on track. Most important from a technical perspective in my analysis, is that 1.3536 was taken out early this morning, negating the one bullish scenario I could come up with to explain the action off the lows of 1.326 last month (see alternate count post from Monday this week).

That clears the potentials a bit, and lends much more confidence to the likelihood of hitting new lows sooner rather than later, keeping me focused on the two bearish counts (see most recent post yesterday).

The short term picture is mixed however, with the action down from this weeks 1.369 high (touching off the blue trend channel) looking very corrective so far. I have included a micro count showing a possible impulsive wave that may be in progress, but I don't have high confidence that once this micro pattern completes, that we will head down to new lows without hitting another high above 1.369, before heading down. If we do, I continue to view this as an opportunity to go short.

With the larger patterns tipped clearly to the side of a new low in the near future, this may be one of the many cases in trading where watching and waiting may pay off with a solid entry position for the next leg down.

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