The weekly $/Eur Chart looks ready for a reasonable bounce. Even if you believe like your humble blogger that a deflationary period (which will ultimately lead to an inflationary period) will bolster the USD, we still have to respect the EXHAUSTION in the Euro.
- On the top of the Chart you see the RSI14 which has registered a reading below 19 on the weekly (!!)
- followed by the weekly MACD which sports a positive divergence
- The weekly bars show a weekly pivot LOW (higher Low & higer High in a 3 bar pattern)
- and we notice the beautiful textbook Gartley 222 pattern (search for Larry Pesavento for more) with a symmetrical AB=CD (A move below 1.16 will kill the Gartley!!)
Conclusion:
If we can get above last week's High (let's say >>1.2430) then the Gartley should carry us to the 1.30-1.35 area. It can go higher (much higher) but we will get a better picture once we are there.
This scenario should also affect the liquidity that went out of the Euro to hide in Gold....
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