Good Evening from down under -- Even I'm away from telegram chats but I always following you guys, in my current analysis the potential flat correction is moving lower right now. The Euro retreated as expected, and reached 1.0764 as this analysis writing is being prepared, well below Friday’s low 1.0801, and therefore we should keep an open mind towards the possibility we have been talking about for a few weeks now, which is that we are currently within a flat correction pattern that could probably target Mar 19th low 1.0613, which is the bottom of wave A of the flat correction (that is of course if we are correct about it being a flat in the first place). Another very important level in the same area is 1.0627, which combines my fibo count on 71.4% retracement for wave 1, with the rising trend line from March 13th 12-year low. So it may be reasonable to say that 1.0613/1.0627 is a reasonable target area now.
This short term bearish bias is supported by 2 bearish breaks: the break below the bottom of the hourly channel which can be drawn from March 19th low (the line channel on the attached chart), and the rising trend line from March 16th low. These breaks suggest that we could target the 3rd support, provided by the rising trend line from Mar 13th 12-year low, which is currently running extremely close to my fibo calculation on 71.4% retracement at 1.0627. The reasons to believe that there is a good chance of reaching, or at least approaching this target are strong reasons.
As you guys can see the attached fuiles, the drop has penetrated below the micro term Fibonacci 61.8% at 1.0781, and it moving towards the micro term my fibo calculations at 71.4% retracement at 1.0738. This is now a first support. If we are right about our “flat” theory, this level must be broken. However, it is followed by more important support levels at 1.0676 & 1.0627. It is still highly probable that one of these levels will be the hero for the bulls, and will force the price to start rising again, but what changed now is that 1.0627 has gained a lot of votes, making it our favorite downside target, ahead of these 3 levels which while they still important, have lost the pole position to 1.0627, which looks like it’s on its way to be this “hero”.
In case we break below 1.0627, that would be a surprise, and would warn that we are not right about waiting for the Euro to explode from current levels. In this case, the price will be expected to target March 19th low 1.0613, ahead of more important lower levels, especially 1.0545.
After the weakness seen since Thursday, resistance can be found at 1.0810 first, ahead of the first micro term level at 1.0846, and the first Fibonacci retracement at 1.0874, the ideal correction target at 1.0908. If we surpass the ideal target, the bulls will be expected to target 1.0942 & 1.0970. A break above this last level would be harmful for the short term bearish outlook, and would indicated that the falling correction from 1.1052 is probably over, which takes the logic out of the flat scenario, and the reasoning out of waiting for 1.0627. Happy hunting..
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