From the FXWW Chatroom: In spring last year, we discussed a consolidation period
in the EURUSD favoured by behavioural aspects (Wave
Theory/fractal geometry). Now, the consolidation period
is nearing its end and we believe a renewed decrease in
the exchange rate will take place. In August last year,
the EURUSD rallied during the collapse in risk appetite.
We still have not taken out the 1.1714 high, which previously
led us to believe that the consolidation was taking
the form of a narrowing triangle. We think this option appears
less likely, especially as this option is negated in
the case of the US dollar index. This suggests that we
should see a test, and a probable break, of the 1.1714
highs, with the price stopping at around 1.18.
We recommend selling EURUSD on rallies, as we expect
it will trade lower after the summer. [Handelsbanken]
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