Wednesday, October 14, 2009
EUR/USD Possible Bearish Setup; October 14, 2009
The EUR/USD has formed a wedge, possibly an ending diagonal. According to EWP, ending diagonals are ending moves that signal a severe ending of the previous trend. This is exemplified by the typical throwover above the trendline (see above EUR/USD 1 hour chart) and then reversal which is creating a reversal candlestick on the hourly chart. If the reversal candlestick holds and a new high on the day is not achieved, it could signal a significant reversal for the EUR/USD and bring an advantage to the bears.
Right now, only the GBP/USD is offering a clear EW pattern, and it's very bearish right now and in a small wave ii rally.