XEU Euro Daily Chart Descending Triangle Positive Divergence

Daily chart updated to show the descending triangle target we forecasted over the last month at 133-ish was satisfied. There are a couple juicy gaps remaining below but they will more than likely wait for the future. Note the pink lines over the last month showing a falling wedge, oversold conditions and positive divergence now in place across all indicators, thus, the euro is ready to bounce back upwards for the days ahead.

The ADX is at 34 indicating that the down move was a strong trend so the bounce in the euro that should occur now will be a simple relief rally and the overall downtrend will resume in the future. Note how the euro is now below the start of the year number (red line). Projection is a bounce in the euro from the positive divergence over the coming days but with the strong trend downward indicated by the ADX, the weak weekly chart, the RSI, stochastics and money flow under 50%, and price under the 20 MA, the weakness will resume as October moves along.

The euro bounce in this short term would target the gap at 133.80-ish, and perhaps 135.30-ish, but a lower euro is in the cards for the weeks and months ahead with price moving lower to test support at 130-ish. This information is for educational and entertainment purposes only. Do not invest based on anything you read or view here or any links connected to this information. Consult your financial advisor before making any investment decision.

Note Added 10/3/11 at 4:25 PM ST:  RSI lost its positive divergence with the sharp drop at the close but the positive divergence remains for the other indicators above.