Daily Outlook 14.01.2008 by Dimo Dimov

The chart shows the last few days’ movement. It is definitely very strong but I don’t think that we deal with an impulsive movement. My wave count suggests that a complex corrective combination is developing from 1.4308 (20 December) and the current movement is part of it. My idea is that it should stay below the 1.4966 high so I entered short earlier today. However I have to admit that currently there is no signal yet that the expected sell-off has begun. I entered short because as long as the euro stays below 1.4966 we could see a reversal every moment which combined with the possibility to put relatively close objective stop loss turned out to be a good stimulus for a short position. A fall below 1.4795 will be a confirmation that the expected down move for a low below 1.4308 is under way. A key resistance is 1.4966.

Trading strategy: 10:12 EST; 15:12 GMT

Short position from 1.4881, stop loss - 1.4970, target - open

Confidence level – low

This analysis has only informational and educational purpose and does not represent a proposal for buying or selling currency contracts.