EUR/USD: New Low Ahead
Alexandros Yfantis | Jan 09, 2013 07:34AM ET
The EUR/USD is trading near 1,3050 right now. Although the pair managed to reach just above 1,31, back testing the broken upward sloping trend line as expected, it did not have enough fuel and buyers to support it.
The rising pattern from 1,30 is overlapping and not impulsive. The only viable bullish scenario is that we are now inside a smaller degree wave ii up. However this version has several drawbacks. The second wave ii is too much bigger than the larger degree wave II, something that is not usual. Therefore bulls should be very cautious as prices could retest 1,30. If that's broken, prices would then test the 76,8% retracement at 1,2975.
After the back test, prices have started to move downwards making lower lows and lower highs. This is characteristic of a down trend. Confirmation will come if prices break below 1,3015 low. Until then, the following bullish wave count is the most probable scenario.
Those who favor short positions and believe that 1,2975 will be achieved, could use as a stop, the last high made at the 1,3098 level.
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