Dear fxbeat readers andwhatsapps group,.. for the third time in a few days, the Euro has found another daily high inside our resistance area 1.1361/76. Yesterday’s daily high was 1.1362 in my Saxo chart. This 3rd daily high inside this Fibonacci micro term area could be the last, because after another failure inside this area, the bulls may give up on trying to break it, and give room for the bears to pull the price a little lower. Remember that the Euro held above its micro term Fibonacci 50% level, seen on Thursday at 1.1262, but the subsequent rising move topped at 1.1368 on the same day, then at 1.1364 on Friday, and again at 1.1362 on Monday. When calculating the retracements for drop from Jan 27th high to Thursday’s low (1.1423 to 1.1260), we find that the price has topped both times inside the Fibonacci 61.8% & 71.4% retracement area 1.1361/76. This area is now the important resistance to beat. On the support side, Thursday’s low of 1.1262 is surely important, but I believe the weakness seen on Friday could push the price a little lower, closer to the micro term Fibonacci 61.8% retracement at 1.1222. Finding support here would be very good for the bullish scenario someone here a big fan of as I said yesterday (Kevin knew that person I mentioned here... I guess). The bulls will only come under serious pressure if the price breaks below 1.1190 in a clear & clean way, and in this case, the very important bottom at 1.1097 could come under attack by the bears.
First support is provided by the rising trend line from Thursday’s low, which is currently running around 1.1300. This level is followed by 1.1260. Breaking below this level would open the way lower towards the other micro term retracements at 1.1237, 1.1222 & 1.1190. My favorite out of the three is 1.1222 because it is close to the bottom of the slightly falling channel which can be drawn from last week’s high. (Get ready when reached this level - Del, Ken, Nader, Adnan, Mie, Naim,Tiger, Sunil, Kelly, Greg, Amanda and others)
As it is always the case with retracement levels of all degrees, a bottom very close to any of them would be a sign of potential strength to follow, while breaking below each of them should be interpreted as a sign of weakness, especially the last one. A break below 1.1190 is highly unexpected in my opinion, but in case this surprise happens, it would mean that there is a good chance that the price will drop to a new multi-year low, below the 1.1097 low (without neglecting last hope support at 1.1144). In this case, the price will be expected to target 1.1046 & 1.0998 ahead of 1.0826.
First resistance is obviously the important resistance area 1.1361/76 at hourly triple top chart. The price has already failed 3 times inside this area, but in case the bulls can clear the 1.1361/76 area, the single currency will be expected to trade above last Thursday’s top 1.1423. In this case, first target will be 1.1430, followed by 1.1457 & 1.1513. Breaking above all these levels would be a great step towards confirming the end of a 6-year correction, and that the Euro is going to rise on the long term but as I said earlier that I am a big fan of Bears Club and nothing more except Parity to come sooner or later but I'm cannot ruled out too for larger correction in Elliot Wave projection if US dissapoints Sellers in mid term too!! Expect to be unexpected and in FX nothing impossible as I repeat many times here.
Please allow me to talk once again about why I think there is a very good chance that the Euro has ended a 6-year drop from 1.6038 (as I always said before parity about 1.20/1.18 level), and that it will move much, much higher in the next few years. My favorite possibility is that we may have seen a very important bottom early last week, and to keep this idea in mind as long as it holds is very important. On January 26th, the Euro bottomed at a new 11-year low at 1.1097 (Break this level for next 1.08/07 before 1.05 and Parity). At first, this may seem like just another low in this sharp downtrend, but it may be a very, very special one! In the support section of our reports for the past 2-3 weeks would have, you may have seen my analysis including this support twice or thrice a week if I'm not busy: Good Luck guys...
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