The EUR/USD moved out of the pitchfork channel above the 50-day moving average and now correcting up to the previous Fibonacci retracement level and the 100-day moving average around 1.30. It is hard to say if the lowest point is already behind us. We will have to see if the next down correction will move past the last low point. I think we are making an up correction wave (B) and that a last correction wave (C) will come next. We only can wait and see to be sure. That last down move would bring 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 finds support on the 200 months' moving average. Short term we have an extension in the (B) up wave to a level of about 1.30-1.35. We expect this up correction to be in the order of 1000 pips.
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:
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 and finding support on the 200-month moving average, 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
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