€$ & USDX

Here are 3 charts of the current DX ( charts shots are approx 1330hrs 2/12/2010 central Euro time). You can see the 50% RL from the sky blue upsloping fork effecting price and channeling it downwards.I use both 50 & 100% RL's and Ensign automatically draws at 50% intervals. They are often just as potent as 100% RL's (this refers to the distance of P0 to the p1-p2 line ie half/50% or all/100% of the distance projected forwards into the fork). Underneath lies an extension of another RL from the pink d-sloping fork. This is a possible support level but i am not sure of this particular RL for other reasons but i have found that extended reaction line rays from past/previous forks are often just as effective many days/weeks after price has left the fork. However price action could come back significantly to the LMLP of the sky blue fork and test 80.00. This would tie in with the Euro which seems to have some life in it again. What i can say which has a high probability is that price will eventually retest the black CL and then the first RL of this black fork which slopes upwards just above the CL and has halted the $ decline. I often repeat myself by means of making an explanation of what i am basing my opinion on so i will say again that i have observed many times price passing through a reaction line and then reversing the trend on the opposite side and either climbing up or going downwards behind the RL...usually however you will see the reaction of the 'face' of the RL. The angle of the RL is also extremely important and 45 degrees being the most reliable and the sharper the angle the more violent reaction but also they are more often passed straight through with no effect showing...so they are less reliable.
Anyway. Now we have a new swing high pivot we can draw a downsloping fork which will show us the possible destination (the centre line) and more importantly the UMLP where we will almost certainly see resistance when price reaches it plus of course the RL's. I draw them for these reasons regardless of whether price takes out the previous SL .Please also remember that all these reaction lines in E-Signal are drawn by hand so have a wide margin of error, but you can normally see where they align with price action if you look in a smaller TF. The conclusion is that i think price is eventually going higher but this maybe a significant retracement on the DX with the sky blue LMLP being a retracement of around .382 (if it ever gets there). I am unsure of where support lies and as such i would not consider any long position yet.





















Here is the Euro$. These charts below have very few reaction lines and because of this are almost useless but they do show me critical long term median lines which i find often have a similar effect as reaction lines. I expect the Euro to gain more ground and at least test the red CL(from a massive weekly fork) which lies at 1.3250 and the green d/sloping CL at 1.3300. Here we will see wither failure and a fall or onto the next level but taking into consideration where the DX is i guess we will struggle to see price much higher than the 1.3250-1.3300 level. If you look at the possible wave count we have further to go. I would not want to be short euros & i have such little confidence in the current market that i am flat on both the €$ & the USDX until the situation clarifies and shows me a clearer trend and possible entry levels.
Detailed reaction line chart to follow for Euro$