Strategy 20 November 2013 |
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Even though EUR/USD continues its gradual ascent the current move higher looks corrective and we still expect to see a drop back towards the 200 day ma at 1.3218 unfold before the end of the year.
EUR/USD has recently seen emphatic rejection from the 61.8% retracement of the move down from 2011. This implies that the entire move higher from the 1.2042 July 2012 low was nothing more than a correction. The Elliott wave count on the weekly chart denotes 1.3833 as the end of the 4th wave.
Also recently the market failed just ahead of the 1.3958/1.4002 key resistance which represents the 50% retracement of the move down from the 2008 peak and also the 2008-2013 resistance line.
As a consequence we remain bearish and we look for losses initially to the 200 day ma at 1.3218, the 61.8% retracement at 1.3165 then the 1.3104 September low.
Longer term we would expect to see the market drop towards its 200 MONTH moving average at 1.2083 by end of 2014.
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