Although there was a flurry of buying initially on news of a deal in Cyprus, the enthusiasm for euros seems to be tapering off in the wee hours. It seems unlikely that the rally will get very far, and so we should look for the pattern that I’ve highlighted to relapse into a c-d follow-through to the downside. Strictly speaking, it would take a rally to 1.3298 — well above these levels — to correct the downtrend sufficiently to prepare it for another leg down. This is shown in the elongated k-A segment labeled in the chart. ________ UPDATE (1:03 p.m. EDT): The heights achieved by Sunday night’s psychotic opening bar proved fleeting indeed, and now the euro has done what it ought to have done to begin with — i.e., relapsed to a low beneath last week’s 1.2852 bottom. Still-lower prices impend.
