Tuesday, May 10, 2011

Retracement or New RALLY ?

Let's check with the FX Markets where the journey might go.

Observations:
  • AUSSIE (nice Commodities Proxy, thing GOLD) traces out a nice Wedge with overlapping swings (compare to a pure IMPULSE with NO overlapping swings)
  • AUSSIE correction is right in the Zone
  • RSI correction zones (upper limit 60-65) seem to hold
  • EURO doesn't even aim at the 38% Fib level


If this is supposed to be more than a short covering bounce then we need to see some serious upside action in both currencies fairly soon, because otherwise the benefit of the doubt goes with the BEARS.

BASIC RULE: The IMPULSES always determine the direction of the TREND!

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