Forex Technical Update July 8, 2010 EUR/USD in a Wave 5 Diagonal Triangle?
- 1H: Following the EUR/USD as it rallies towards 1.2750 as posted in the previous update. The market is indeed rallyign towards 1.2740/50, however the momentum is slowing, as we see a lengthy bearish divergence forming.
- The pattern of the rally that started near 1.21 suggests an impulse wave. In the bigger picture, this is probably a wave C in a zig-zag.
- If this is true, we are in wave 5 and it looks like a diagonal triangle forming. These patterns are only valid in terminal waves such as wave 5, or the entire wave C. They also suggest sharp declines to follow.
- The US session start is correcting the rally, and this may be a wave iv of 5. Then I will be stalking wave v or 5.
- I am not expecting the market to decline past 1.26 in the US session decline, so if it does, I will have to revisit this outlook and make some adjustments.
Fan Yang Currency Analyst Commodity Trading Advisor
Information and opinions contained in this report are for educational purposes only and do not constitute an investment advice. While the information contained herein was obtained from sources believed to be reliable, author does not guarantee its accuracy or completeness. FXTimes will not accept liability for any loss of profit or damage which may arise directly, indirectly or consequently from use of or reliance on the trading set-ups or any accompanying chart analyses.
All screenshots are made from VT Trader 2.0 and are of actual market data at the time of the screenshot.