The EURO vs US Dollar fall from grace has been, for all purposes, relentless. Economic indicators continue to be weak as investors anxiously await the ECB. Will Mr. Draghi and the ECB stem the Euro collapse? Will the next Euro target matter?
I’ve tried with little success, to look for a counter trend bounce, to in turn position for another short opportunity. While the levels have been respected – the first square out in time and price presented a 400 pip rally – they have all, eventually, been crushed within a few days or weeks.
Unfortunately for the EURO I believe this is wave 1 in a series of further waves to follow. So, in order for balance, harmony and structure to present themselves the next counter trend bounce should be: 1) a couple months in duration (believe it or not) and 2) perhaps 800-1000 pips higher. That bounce has not occurred.
So let’s look at what we know:
- We are at an all-time high in US Dollar optimism and, vice a versa on EURO pessimism.
- Oversold technical indicators are at an extreme with a bullish divergence present.
- We “squared out” for a second time on Friday.
- We are approaching a large Euro target area in and around 1.10-1.12
So, again, looking for a “nice” counter trend bounce to, ultimately, get short the EURO vs USD for a potentially stronger move lower.
See the charts below for updated Euro targets based on chart patterns. Thanks for reading.
EURO Chart – Technical Support Levels
EURO Price Targets Chart
Euro currency image from Wiki Commons.
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No position in any of the mentioned securities at the time of publication. Any opinions expressed herein are solely those of the author, and do not in any way represent the views or opinions of any other person or entity.
