Euro Crosses Breaking From Corrective Patterns


Commentary - With all of the 3 wave movements since the 8/27 high at 159.67, it is possible that a triangle is unfolding. If a triangle is unfolding, then it would likely form for the rest of the week and give way to a terminal thrust above 159.67 and possibly test the 61.8% of 168.94-149.25 at 161.42 before a larger degree bear wave brings price under 149.25. Another possibility is that a flat is unfolding from 159.67. In this case, price would test the 50%-61.8% of 149.25-159.67 at 154.46/153.23 before testing the 160.00 area. In summary, expect consolidation (possible at lower levels) prior to a rally that leads to a top and reversal closer to 160.00.
Strategy - Flat

Commentary - The EURCHF reversed from the 61.8% of 1.6686-1.6175 at 1.6491. The 9/4 and 9/5 high at 1.6498 represents the high of either a b wave or 2nd wave within a bearish cycle that began at 1.6686. Look for a test and break of the trendline drawn off of the May 2006, March 2007, and August 2007 lows. The next bearish targets are 1.5986 and 1.5670 (Fibo extensions).
Strategy - Bearish now, against 1.6498, targets 1.5986 and 1.5670

Commentary - The EURGBP has been stuck in a correction since mid-March and it looks like the correction will continue for at least a few more weeks as the rally from .6679 is not impulsive. The choppy rally gives scope to a drop below .6679 before a long standing bottom forms. Reversal points are at .6662 and .6606 (61.8% and 78.6% of .6535-.6867). Still, there is little doubt that the pair is headed much higher in coming months (as the rally is clearly impulsive and the decline corrective).
Strategy - Bullish on breaks above .6867

Written by Jamie Saettele, Technical Currency Strategist of