Guest Commentary: Where are the Next 200 EURUSD Pips?!
* The Euro's favorite corrective formation duly broke down to the 1.21 Fibo target to satisfy the downtrend.
* Although we have covered shorts and started buying, beware a smaller version of the 'favorite formation' could provide a nasty shock.
* We are scaling into longs though for an even nastier shock into next week!
The Euro has broken the 1.2165 low to confirm its favorite formation...the upward ratchet...was indeed corrective...and so takes it to a critical near term juncture.
Indeed following the typical complex correction to 1.2325, the loss of the 1.236 multiple targets (1.236 of the last rally to 1.2750) has spiked the more probable ideal 1.382 object of 1.2100 to satisfy the downtrend for now. However, if you look at a weekly down to a daily to an hourly you see the downtrend use this favorite formation to squeeze one more new low each time. So it would be typical for the Euro to push lower today at least to 1.2065 and possibly after another minor upward ratchet back to the 2.3% of 1.2123 possibly the previous 1.2165 low and 38.2% set up a final aggressive 1.1980 (5=1 objective from 1.2750).
We have now covered and shorts and started buying for a pivotal 1.1980 to 1.2180 consolidation but with the threat of a reversal later this week back to 1.2325.
Stops? A loss of 1.1960 would suggest the decline is accelerating.
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