OK, Eur
o still looks weak and although i have a certain amount of trepidation i still expect to see a new swing low formed. This smells, looks and feels like a reversal rather than a correction and if that is the case we may well see huge divergence in the indicators which can continue to outstanding levels. There is no doubt we will see a much sharper and more consistent Euro rally at some point but i was amazed this weekend to see how many folks out there are mega short the USD and the
COT charts are enlightening. I guess the time is coming where everyone will have to get off the fence and decide and the USDX will show them & me the way forward plus we will all await the outcome of the new Irish EU bailout. The €$ chart above shows several forks (please remember that i firmly believe that there is no "one" correct fork to express price - You can & should draw as many sensible forks with RL's as possible and you will see that each fork may have several important pivots and interaction with both the median and reaction lines of each fork) of which one has parallel warning lines. The most recent swing low at around 1.3620 is not going to be around for long as a re-test of the 1.3600 level beckons. The Euro chart shows me the basic trend is down but without reaction lines drawn , it is like a motorway without signposts and you never know when or where your exit is coming up and when to turn off.
o still looks weak and although i have a certain amount of trepidation i still expect to see a new swing low formed. This smells, looks and feels like a reversal rather than a correction and if that is the case we may well see huge divergence in the indicators which can continue to outstanding levels. There is no doubt we will see a much sharper and more consistent Euro rally at some point but i was amazed this weekend to see how many folks out there are mega short the USD and the COT charts are enlightening. I guess the time is coming where everyone will have to get off the fence and decide and the USDX will show them & me the way forward plus we will all await the outcome of the new Irish EU bailout. The €$ chart above shows several forks (please remember that i firmly believe that there is no "one" correct fork to express price - You can & should draw as many sensible forks with RL's as possible and you will see that each fork may have several important pivots and interaction with both the median and reaction lines of each fork) of which one has parallel warning lines. The most recent swing low at around 1.3620 is not going to be around for long as a re-test of the 1.3600 level beckons. The Euro chart shows me the basic trend is down but without reaction lines drawn , it is like a motorway without signposts and you never know when or where your exit is coming up and when to turn off.
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