The Euro Puzzle

The above chart is the EURO against the dollar. It is by far I believe the most watched chart in the world. Currently, it is being a pain to swing trade. A sell signal has been issued but in such a way, there is little to gain from it if you agree with the way I read the chart.

I look for reoccurring patterns to help out in the rollover system. I draw 3 lines on the chart. The first two lines gave clear sell points after large run ups. The last line on the chart is not as clear. The two boxes I draw show similar topping patterns. If you waited for the first pattern to play out, the majority of the move to the down side was done. I believe that for the current pattern in the box.

Next to look at is the likely place for the move. Based on the highs and lows of recent action plus my belief the US dollar will get killed at some point, the EURO looks like it would retreat to the 1.35 to 1.36 area and find good support. If some panic happens in the markets, it could go as low as 1.30.

So what is the plan? Two ideas, either trying selling the EURO at 1.40 with a stop above 1.42 and a 1.35ish target or just wait until the EURO retreats to the 1.35 area and look for a buy signal.

Both the Pound and the Aussie Dollar did not correct much the last time the EURO corrected. I would look to use the EURO as the key to trade the next buy signals for those two leaving the sell signals alone.

The Denarii Trader