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Friday, May 20, 2011

EUR/USD - Correction or a new impulsive decline?

The price-action since my post from yesterday, didn't support the possible red wave (iii). The only possible valid impulsive action is to count the rally from 140.46 to 143.45 is that we have seen an Leading Diagonal. If this is the case, we should support near 141.24 area.
This scenario is only valid if 140.46 isn't broken at any time. A break below 140.46 will switch the count towards a bearish wave iii decline. If however 141.24 and more importantly 140.46 isn't broken and we instead sees a break above 142.60 we should see a new rally above 143.45 towards next resistance at 144.23.



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