Daily Outlook21.11.2007 by Dimo Dimov

The fall started from 2.1160 is obviously corrective in nature. This does not change my idea that 2.1160 is a multi months top and I still expect a move below 2.0000 but trading will be very difficult because corrective movements allow lots of possibilities and usually require too far stop loss. The chart shows my working count. The fall to 2.0352 is three waves structure and the subsequent recovery is also corrective in nature. The big question here is what is the position of the three waves fall (2.1160-2.0352) – wave A or wave W. The former scenario requires at least 61.8 % retracement of the fall started from 2.1160 before resuming of the down move while the latter scenario allows resuming of the downtrend from current levels. From a short term point of view I expect a fall to 2.0485 in both cases so I entered short position earlier today for this movement. I already mentioned that the situation is unclear from the longer term point of view. A key resistance level is 2.0696

Trading strategy: 09:20 EST; 13:20 GMT

Short position from 2.0634, stop loss - 2.0702, target –2.0490

Confidence level – changed from low to moderate

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