EURUSD--December 9, 2008
Catching up on the big picture in euro patterns.
A weekly chart that shows an alpha-beta base formed in September between 1.3878 and 1.4865.
Looking at this pattern on a daily chart--the 1.618 delta target was 1.3269. There was a low at 1.3257 on October 10 and a subsequent pullback. The 2.618 target was 1.2282. The lows made on October 27 and October 28 were within the "zone" of this target. The subsequent pullback took the market above the 1.618 downward target--in effect, a 32.8% retracement of the impulsive move down.
And in fact, when the target low is replaced by the actual low, the sharp 3 day retracement which culminated on October 30 was within 1 pip of a 38.2% retracement of the entire impuilsive move down from 1.4865.
The 1.272 target below the October low would take the market down to the November 2005 lows around 1.1640.
Projecting internal fibonacci levels down to that target shows the low in October as the 78.6% level of the move.
Since the October low we have been trading sideways in what appears to be a triangle pattern. But since late November, it is possible that the market has moved past that pattern and is setting up something new.
