To all dear followers and readers here,..the price was not expected to drop below 1.1366, but reaching 1.1304 yesterday may have provided traders with a better price to buy (B.O.E.S - Buy On Every Shedding). The rationale behind this is that this stronger-than-expected correction has reached the 50% retracement for the whole move from 1.1097 to 1.1534, which is at 1.1316, and bottomed relatively close to it. This may not be the most accurate of the stops seen recently at retracement levels, but it still reasonably close to this important level.
If we draw a line connecting the daily highs seen on January 27th & February 3rd, and then take the parallel line to it, and place it on January 26th 11-year low, to create a channel, we can see that the bottom of this channel is currently running just below 1.1304, and in time it will unite with yesterday’s low since it is a rising channel. This is the support to watch for now, even though we have a closer support at 1.1350, but it is obvious it is not as important as 1.1304. Of course, other retracements for the whole move from 1.1097 to 1.1534 deserves our attention, including 1.1264 & 1.1222, but 1.1304 is now the most important support. A break below 1.1304 would put 1.1264 & 1.1222 under pressure (S.O.E.R - Sell On Every Rises), but a break below 1.1222 would be even more harmful, as it would open the way to 1.1159, which is the last retracement before the 11-year low 1.1097.
On the resistance side, the falling trend line from Tuesday’s top is currently running very close to the current daily high 1.1397, and this will be our first resistance for today (already get above and broke the level). A break above this level would open the way higher towards 1.1419, 1.1446 & 1.1468. A break above the last one in specific would improve the chances of trading above Tuesday’s top 1.1534. In this case 1.1569 & 1.1596 make very good targets.
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, 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. 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 my analysis for the past 2-3 weeks would have, you may have seen the analysis including this support every single day: However, I'm still believe in parity for this pair sooner or later.
• 1.1096: the equality target, where wave C equals wave A.
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