Technical Analysis of Euro Vs. Aussie and loonie
As initial part of the Euro’s recovery path, the two bullish setups that are emerging for the Euro are against the Australian dollar, and the Canadian dollar. Purely from a technical analysis perspective, it can be seen at a primary wave cycle level, that the Euro has maintained an upward momentum against the Australian dollar, even though at the intermediate level, a consolidation pattern has been the case during the latter part of 2015 and 2016, which is setting up the precedent of a massive upward momentum in the Euro in the near term. A Fibonacci extension of 1.618 would mean that the price action should make the Euro appreciate up to a level of almost 2 against the current level of 1.49, which is a massive 3500 pips appreciation? Also the PNF analysis is pointing to a net upward momentum and an activated target of 1.8 which also is a healthy 2000 pips appreciation. Downward targets remain inactivated, which means that the bias for the Euro is up against the Aussie, and with an Elliott wave pattern of wave 3 emerging, the probability is tilted highly in favor of a sudden appreciation in the Euro. Most crucial from a PNF point of view is the fact price action should initially breach the 45-degree line of resistance, before proceeding to a double top formation, which would give the indication of ensuing upward momentum. Also the MACD has been traversing downwards for some time now, and it poising to change direction, which would be a signal to go long the Euro.
A similar case is persisting, with a triangular converging pattern being set up, which is developing within a long parallel channel. What has been promoted all along is for a 5 wave intermediate pattern to fully unfold to a point C, which could mean further deprecation of the Euro, but trade setups can be made prudently with low amount of capital which can be steadily built up. Again PNF targets are pointing to a 1.8 target so is the Elliott wave pattern, which is again a 2500 pip price build up in favor of the Euro. The stochastic has also been consolidating, which means that enough impetus is being built up for the price action to help lift Euro, that should propel the price action it to 3rd of 3rd wave pattern. A long appreciation trend could ensue.