XEU Euro Daily Chart Falling Wedge Oversold Positive Divergence

Falling blue wedge, oversold conditions and positive divegence point to a bounce for the euro. Note the red cicles in early October that wanted to see a lower low in price, and now they have received that request. The pink boxes show that the down move in September was a strong trend, and to this end, the downside resumed again in November. The ADX is climbing again to indicate a strong trend for the euro down move again. The October up move was not a strong trend so that can be assigned as a countertrend rally.

Lots of folks are short the euro so any positive divergence bounce now may then get fueled with short-covering so the move up may be quick and surprisingly strong. Key levels are where the hanging man and doji candles are at 134 and 129, respectively. If price bounces off the divergence as expected, watch to see if the 132 resistance is taken out to the upside, or not. Projection is for a bounce in price to occur now for a countertrend rally, but, moving ahead in the weekly and monthly time frame, the strong trend should resume with sideways to sideways lower prices moving forward. Lower euro=lower equities. 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 12/15/11 at 9 AM:  Euro now printing 130.40.