The Euro Dollar up-date

I have left EUD for some time. My last entry on this counter was before its further deterioration. There was a warning from the the 3 black crows to stop me from buying the Euro. Greece event has definitely taken its toll on Euro, it is however quite a wonder that the chart gives advance warning about the incident. So the charts do tell fortune afterall. But just like any other forms of fortune telling, it relies on probability.


Fig 1 EUD Monthly Chart

This time round, I am using a top down approach to look at EUD. I first make use of Elliott's wave strategy to determine its position. It is a little unfortunate that I have 2 sets of count, limited by the complexity of the B wave.

The first set of count considered an ABC wave have been completed followed by an X wave. The present downward movement is actually a new A wave. The reason for this is that the C of the first set of three wave is of equal length as compared to the A of the set. B itself already contains 2 sub-sets of three waves.

The seconde set of count assume that the C and X wave is only part of a huge B wave, making the present wave a C. If I base on this assumption, the C is a little too long compared to A. Nevertheless, the C wave is of 5-wave formation. If this does not fit the profile that well, why an alternate count? The reason is a double top formation which provides an objective of 162.618. This count will allow EUD the possibility of fulfilling the objective with a B wave to retrace back to the neckline at 192.074 before plunging to its final destination.

But no matter what, the next wave is an up trend, the only difference is the up of the set wave count is longer. The question is: when the reversal?

Adding on with the Fibonacci retracement using the Bull 5 waves as reference, EUD is already close to its 61.8% retracement line (175.346). This allows me to assume that it has some way to go before it reverses.


Fig 2 EUD Weekly Chart

Already the indicators RSI and Stochastic are at the bottom of the chart for Monthly, Weekly and Daily Chart ( not shown), so EUD is itching to move up. The only problem is that the candlestick on the weekly chart shows an opening Marubozu candlestick which is bearish in tendency. This will however coincide with the assumption that it is close but not yet reaching the bottom.

If EUD should be climbing up, the resistance levels are at around 184 to 186. Support would be the 61.8% Fibonacci retracement at 175.346.