Reviewing the daily time frame the pattern is a 5 wave upward gradient channel pattern possibly in an intermediate 5th wave. The long legged doji
shows a point of hesitation and a possible reversal in intermediate currency trend movement. Well, this coupled with the fact that stochastic
is reaching an overbought level and the MACD
is also poised for reversal as it is in an overbought state and the histogram, as per it cynical nature, next poised for a downward movement, a small price correction may be in the offing. But would it be worth
trading? That’s the question to be asked because the dip in the Euro0.06% may just be a temporary phenomenon as the market relieves itself from an overbought state with the sentiment still clearly in favor of the Euro0.06% . This bigger market trend, biased towards the Euro0.06% is more visible by the weekly and monthly charts as on both these charts, we see advancing blocks. This is also congruent with long term Eurozone fundamental outlook. However, over this time frame there is bound to be a reasonable correction on course for the Euro0.06% , as this may coincide with the FED tightening interest rates and this could still be a couple of months away. Stochastic
is oversold on the monthly chart, which shows that the targets of 1.55, as shown by the PNF’s, are really quite conceivable after an initial bashing by the loonie.
Some interesting references: