Eur/Usd : Target is 1.18

1.18 is the eventual target but there are different ways price could get there. Looking at the 4 hour chart i see 2 possibilities of where price could go in the near term. First is the count i've been following, this is my main count. In this case the trendline should not break and price should continue lower after a small rally in the beginning of this week.



The alternative count is a completed complex double three. In this case the trendline should break soon. The question will then become how high the rally will go. 1.4246 could still be broken if wave X isn't complete yet. Another possibility is that the decline is wave A and the wave B rally stays below 1.4246.



When looking at the daily chart we can see a trendline break which was nicely retested by price later on. Today we are at another trendline, which is not as strong as the previous one but could offer some indication of where price is going, will price bounce or break? We can see that price has started to break this trendline, but this was at thin market conditions. As you can see, we are in a big wave Y and price should eventually go below the wave W low at 1.18.



One last thing i would like to mention is that price is very sensitive to news at this time. And the news hasn't been very good. There's Italy which is big enough to take down the entire euro should it become the next Greece. France, which looks like it could soon lose it's AAA status. Germany which has had terrible bond sales last week. And even smaller countries like Belgium are in trouble, they had their rating lowered, mostly because of the Dexia problem i believe. So be sure to follow the news carefully, any rally could reverse on the smallest news event as the outlook will go from bad to worse.