Euro Crosses: Bear Has Firm Grasp

The Euro crosses (except for the EURCHF) will likely weaken in the weeks ahead.

5 waves up from the January 2007 low at .6535 suggests that a large corrective decline is underway from .8187. The Fibonacci zone does not begin until .7556. The spike to .8033 yesterday may be the end of a small second wave. Ideally, price remains below there on its way for a break of .7750.

We maintain that 5 waves up from 1.5326 indicate that the longer term trend has turned up. The decline from 1.6376 has now tested the 61.8% of 1.5326-1.6376. If the larger bullish bias is correct, then price should turn up from near here.

The big picture shows a range playing out as possibly a triangle since 2000. Under this scenario, the pair should be headed lower in wave D of the triangle towards 1.40 over the next number of months. Near term, price ideally remains below 1.5481.

It is possible to count 5 waves up from 1.6047 and a corrective decline is underway now. In fact, waves A and B of an flat correction may be complete. Expect wave C to bring price below 1.723 and possibly test the 61.8% of 1.6043-1.8277 at 1.6862.

The EURNZD is vulnerable weakness over the next few months to complete wave E of a triangle that began in 1992. The decline could be significant and retrace as much as half (or more) of the advance from 1.6326.

[B]Jamie Saettele writes [I]Forex Technicals: The Day Ahead[/I], Monday-Thursday (published at 6 pm EST), [I]Daily Technicals [/I]every weekday morning (9 am EST), COT Analysis (published Monday mornings), and analysis of currency crosses throughout the week. He is also the author of Sentiment in the Forex Market.[/B]

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[B]Contact at <[email protected]>[/B]