EURUSD--Friday, March 19, 2010
Despite all the negative chatter about the Euro, the last six weeks has seen basically sideways action, with price distributed roughly around 1.3620.
Repeating myself, I must emphasize that this equilibrium level, what would be referred to as "the point of control" in MP, is basically the target area of an impulsive move
The impulsive move and subsequent sideways action seen in a daily chart:
An 8 hour chart shows sideways action around the 2.618 target level. Notice that during that period we quickly found resistance at the next minor Fibonacci level above (2.058). This week's rally failed beneath that level.
Daily price action since February 5 (the last 31 trading days) has focused on a level of 1.3620 to 1.3630.
The important thing to bear in mind is that when an extended Fibonacci target in an impulsive move does not end up being a limit of that move, but rather becomes a center of gravity for subsequent sideways action - as this 1.3631 level has become - more often than not the impulsive move will be continued. This would imply further downside action in EURUSD, with a new downside target around 1.3045.
