EUR/USD Medium-Term Update |
EURUSD: 1.3384
Medium-Term Trend: sideways
Outlook: A month I favored the long side as I thought the Contracting Triangle from the 2008 top had already ended and the single European currency was in its next bull market. However for the past month or so the Medium-Term picture has changed completely and now it is clear that the Triangle from the 2008 top is still unfolding. We have two almost equally likely scenarios now: 1.) if this Triangle is a contracting one, the decline from the May 2011 top is approaching its end and then a powerful rally will develop, most likely in early 2012. OR 2.) this Triangle is an expanding one in which case a decline below 1.18 will occur. I said these two scenarios are alsmost equally likely but at the moment I slightly prefer the red-line (bullish) scenario. But even in that case we should be prepared for more weakness in the next several weeks. Only a move abv 1.4045 will singal that wave [E] might have ended…
Strategy: Stand aside
About the author: Alexander Nikolov
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