Euro update: up expected

As I mentioned earlier, on a monthly chart Euro is within what appears like Falling Wedge. I checked the Bible of TA and it says such extended formations are not true wedges and on log scale charts they will look more like Parallel or Converging Channels (will confirm tomorrow). If you draw a line from the last two swing highs, then a Symmetrical Triangle Formation emerges but more on it on weekly chart. Here I would stick with the larger Wedge or Channel(?) Formations for my analysis. Looking back to 2000, Euro seems to be consolidating before an expected leg up above 1.60. However, as I wrote earlier, I think Euro may complete leg down first. On the chart you can see my five tentative long term scenarios. 

However, once we zoom into Weekly chart (where you can see scenarios more clearly), we can see a Symmetrical Triangle, a consolidation pattern. If Euro does nothing but meanders to the apex of the triangle at 1.3657, then this triangle will lose its significance. So, it better get moving & the latest weekly Bullish Engulfing Candle gives me such hope.

On dailies  things get much more interesting. Euro broke out of the Falling Wedge according to Scenario A described in my earlier post. This wedge gives me approximately 920 pips target to 1.45. Furthermore, the overall pattern from Oct 2010 looks like skewed W that developed into Cup & Handle, which gives me 1,000 pips target to 1.4580. So both targets are close to each other. Finally, the leg down from Oct 2010 of this pattern took place over 18days while the 920pips leg up over 17 days. This gives me approximate time cycle as well.  

All of this means Euro is going to play out according to my least preferred scenario E. It is the least preferred because it assumes that all of those monthly & weekly downtrendlines described above will fail to act as a resistance. While I respect the wedge and the cup & handle on dailies, I respect weekly & monthly downtrendlines even more. So, when Euro hits those downtrendlines, it should at the very least move sideways a bit before breaking out. That is why I will be shorting it tactically against my current long with a tight stop.

Resistance levels where tactical & strategic shorts should be considered & some profits taken:

R1: 1.3745/70   R2: 1.3850   R3: 1.3946/66  R4: 1.4150  R4: 1.4270/80

Follow up on my previous Euro trade:

Euro pierced the bottom of the downtrend wedge and then it bounced back. Needless to say my target of 1.3410 was rich by 17pips. With hindsight, I should have kept my target closer to that downtrendline.  Currently long at 1.3623

Good luck out there.