In this part, I will try to look at the Euro chart. I have attached Euro Daily (EOD) chart and a weekly chart.
Let us start from the weekly chart. In first week of Dec 2009, we saw an engulfing pattern in Euro (marked on the chart). This was followed by a massive drop. Then at points “1” and “2” we saw continuation patterns after a brief stop over. Now that the full target of the fall initiated by the “Engulfing” pattern is nearly complete.
Now look at the Euro EOD chart. We can see that it is “Trying” to make a Double bottom. Note that the second leg bottom came just close to the first one but failed to pierce through. It has now formed a bullish engulfing, indicating that this might most probably a Double Bottom.
If Euro breaches 1.2700, we might see it rallying pretty fast to near 1.3100. This is what I expect it to happen next week. Naturally, it should make Global markets rally quite strongly.
But in case Euro breaches the bottom, then we might see a series of “Gap Down days” in Global markets.
But I am in favor of a quick rally for next week
Some of you might think that “ ha ha .. till last week he was so much bearish… now see…”
Yes. I was bearish. But if Market is showing the signs of a pullback ( I am purposely using the word pullback. You know why…”) then an analyst should also set his mind accordingly. So am I…
