Wednesday, April 14, 2010

Ode to a EUR/USD Bear...

Well, my short term great short term trade opportunity from yesterday was proven wrong with a move above 1.3627. It appears we still have another move up above 1.3691 before the move we are in completes. This would break the blue upper trendline that I have been showing, and but me on the defensive to watch out for a more bullish alternative. The short term bullish count from last week has not changed, and is still an option, but prices would have to move above 1.3816 to clench this as the top option.

So many options, what to do? Corrective waves are fun trying to identify, aren't they? Take a look at the 2 bearish counts below:

What apears to be 3 wave movements in both directions, possibly since what I show as wave [iii]. Primary count is the ending diagonal wave [v] which is what I have been following, but a solid alternate is potentially a triangle wave [iv] still in motion. Triangles are common corrective patterns as the wave preceeding the final wave of a sequence. Usually either a wave 4 or a wave b. If this is indeed the pattern, it may raise the probability of a different longer term count... and [a][b][c] correction. This is the count that my good friend Binve and most of the long term dollar bears are following. If we break through 1.3266 (the low so far this year) without bouncing up in a wave e first, then the ending diagonal maintains its primary status. For now the short term direction of both the patterns is effectively the same, but I thought I would bring the pattern into your thoughts to see the most likely possibilities.

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