Daily Outlook 21.12.2007 by Dimo Dimov
As you can see from the chart, the last weekâ€™s movement was sideways between 113.58 and 112.72 in a triangle pattern. This triangle proved to be bullish one after todayâ€™s break from the upside. The big question now is the position of this triangle. It could be wave B (limited triangle) and in such a case the maximum upside tolerance is 114.00 which should be followed by a sharp fall to 113.00. On the other side it could be also wave X or wave W (non-limited triangle) and in such a case upside potential is very huge. Currently I favor slightly the non-limiting triangle scenario so I leaved the target of the long position opened, but I moved the stop loss above the break-even to avoid an eventual loss from a possible fall in case the limited triangle scenario is developing. A key support is 112.93 while the key resistance is 114.00
Trading strategy: 08:43 EST; 13:43 GMT
Long position from 113.12, move the stop loss from 112.45 to 113.15, target - opened
Confidence level â€“ changed from low to high
This analysis has only informational and educational purpose and does not represent a proposal for buying or selling currency contracts.