Short-Term Trend: weak downtrend
A week ago I favored a short position based on the wave structure presented on the chart above. This wave count (that suggests an Ending Diagonal pattern in wave C) is still valid but the chance of it being correct is now quite low. With the last week's move it seems more and more likely that EUR has already found a significant bottom and a new uptrend is under way. But to confirm the trend change, we need a move abv 1.2670/90 area. Until that happens, there is still a chance for the bears to push the prices lower twd the 1.2145 level.
With all that in mind, one can favor the short side but only as long as the prices stay below the indicated resistance levels. A move abv there will turn the daily chart bullish.
Strategy: Holding short from 1.2550 is favored against 1.2700. Target=1.2100. Longs favored on break abv 1.2700 with 200 pts stop.
Next Update: Sun, 09/09/2012.
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