Update EUR/USD Forex pair: June 26, 2010.

A historical Fibonacci projection gives a price target at 682% for wave [C] down around $1.16. If our last pitchfork does the job, we can expect to reach this level by end of July 2010. This brings the Euro to the level of the previous long term correction wave [4] of the long term up move as you can see in the monthly chart. Price found support on the 200 months' moving average. We are waiting for the completion of waves {C} and long term wave [C] down. If this scenario is correct, then the EUR/USD has completed wave (A) and is now making a correction wave (B) up before we get the final wave(C) down. We are now getting resistance from the Bollinger bands median line and from the upper side of the pitchfork. Short term we may have an extension in this (B) up wave to a level of about 1.30-1.35. We expected an up move in the order of 500 to 1000 pips. We have about 600 pips now.

Weekly Chart:

The Euro made a long term top Elliott wave [5] around $1.60 July 2008. A correction wave [A] was started, retracing almost 50% of the complete up move. Next the correction wave [B] retraced a big part of the [A] wave with extension correction waves {A} to {C}, completing wave [B]. The move down now for wave [C] made already a lower low than wave [A] and with that the wave [C] may already be complete. But, I expect that wave [C] will also have an extension and that most probably we are starting now an intermediate correction wave {B} up. And I expect this correction to go up to around 1.30 and 1.35.

Monthly Chart:

May 30, 2010: The Euro made a long term top Elliott wave [5] around $1.60 July 2008. A correction wave [A] was started, retracing almost 50% of the complete up move. Next the correction wave [B] retraced a big part of the [A] wave, before starting the [C] wave down. Although this [C] wave made already a lower low than wave [A], now reaching the 50% retracement level, I still do not believe that the lowest point has been reached already. There is room in the indicators for a further move down to the level of the correction wave [4] of the long term up move.

Sylvain Vervoort http://stocata.org/