Guest Commentary: MarketVisionTV - EURUSD Thumps Targets Hard...to Provide an Excellent Risk Return
Euro Dollar has broken down to the month old target so aggressively should we change our trading strategy? No!
* The overshoot of both 1.2895 and 1.2875 targets highlights a more cautious approach.
* It begs a rally through 1.2900-10 to confirm a larger recovery.
* However, the excellent risk/return this and later weakness provides argues in favor of reinvesting short profits.
The Euro has finally broken down to our targets and to provide a clearer and more obvious exhaustion gap... and now having quared shorts and gone long...now needs to prove itself.
As having completed a potential trend sequence from 1.3285 it has easily overshot the 1.2895 equality target and the 1.2875 5=1 objective in what is quite a larger than expected last decline... either an extended fifth wave or in fact the middle part of the decline itself.
If our long held view is right that the Euro would end the trend sequence below 1.29 then the Euro will typically recover to fill the NY gap and extension point at 1.2900-10.. and then given the extension probably retest the low in a double retracement before reversing to 1.20980 and 1.3055 the 50% retracement.
This suggest two things. That it will need to regain 1.2905 to suggest it has turned and secondly, given the relatively high risk environment, a safer strategy of waiting for the double retracement to buy with stops still below 1.28.
As a loss of 1.2800 would suggest a much larger decline to 1.2720 initially but at least to the 1.618 multiple to retest the 1.2625 lows.
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