EURUSD--Wednesday, July 7, 2010
The pattern suggested in a post last Friday has worked itself out. The theoretical target was 1.2662, The high yesterday was 1.2661. Since then EURUSD has sold off more than 100 pips.
In this chart we see an alpha-beta base formed the last 2 days of June. This would call for Fibonacci targets 1.618, 2.618 and 4.236 times this base. The 2.618 target (1.2482) was hit on July 1, then a few hours later surpassed. After that it twice proved to be support, making it more likely that the pattern would continue to the 4.236 target at 1.2662.
Interestingly, if one projects the distance of the original alpha-beta base down from the 4.236 target level--
--there is our support level this morning.