EURUSD Fibonacci Pattern Update--Thursday, June 10, 2010
A quick update on the impulsive pattern detailed in a post on Monday.
The pattern showed a theoretical impulsive downward target at the 4.236 Fibonacci level for EURUSD at 1.1894. The implication was that this would be--at least for a time--support. And action since that time has seemed to confirm that pattern.
On a 4 hour chart, I have projected the length of the original alpha-beta base up from the theoretical target. Notice how the last impulsive move down was roughly equivalent to the length of the original base. And since the low during the Asian morning on Monday, price action initially stayed very close to the theoretical target, seemingly confined within a region bordered by the 0.236 Fibonacci level (within the projected base. Then yesterday we rose to a region around the 0,382 level. Since this chart was drawn we have risen above the 0.50 level. Do not be surprised if we find serious resistance around 1.2156 and 1.2318, levels equivalent to 0.618 and 1 times the original base level projected up from the theoretical support.
And one last chart, just to emphasize that the action since support held early Monday morning has not exactly been overly bullish. So it might be wise to consider a further downside target if and when this counter trend move ends. That target might be the next power of phi down--6.85 times the original base. That would take us to the region around 1.08 or a little lower.