Euro

Two patterns nicely visible on the 30-minute chart -- one small, the other large -- project to rally targets at, respectively, 1.3674 and 1.3789.  A bullish bias is suggested as the futures work their way toward these numbers, but either can be shorted with a stop-loss as tight as six ticks. ______ UPDATE (12:51 p.m. EST): The upthrust we were expecting carried to 1.3680 before settling back, but longs had plenty of time to implement a trailing stop to protect gains. Shorts from the target would be ahead at the moment if they used a stop-loss of seven ticks or more, since the high occurred exactly six ticks above the pivot.

The futures have had little trouble creating fresh impulse legs on the hourly chart with each new thrust, so look for this rally to show some staying power.  Traders should nevertheless expect a show of resistance at 1.3603, a Hidden Pivot that is my minimum upside target for the near term.  On the pullback in motion at this moment, night owls can try bottom-fishing at 1.3412 using a 1.3413 bid and a four-tick stop-loss. The pattern is shown in the chart. ______ UPDATE: The futures took a 105-tick leap from an overnight low of 1.3413 (!), so in theory this trade would have been a solid winner for anyone who followed my instructions mechanically.

After three weeks of gratuitous delays, the euro has resumed its predicted collapse with a vengeance. A whiff of Spain's predicament, perhaps?  No matter.  My downside target for the March contract is 1.2689 (Note: This has been corrected upward), and you can plan on bottom-fishing near there with a 1.2692 bid, stop 1.2682. _____ UPDATE (January 13): This week's short squeeze may look impressive on the 5-minute chart, but it would need to hit  1.3494 to negate our bearish target.  Meanwhile, there's plenty of camouflage cover for a bull trade using Wednesday's 1.3142 high as an impulsive point 'B'. (Late note:  The camouflage set-up, with single-bar coordinates at B-C, worked nicely, signaling a long entry just ahead of an extremely powerful, 2.5-cent rally.)  _______ FURTHER UPDATE (January 18):  The futures have rallied ferociously, apparently because German paper has been enjoying strong demand. It would take a print above 1.3493 to invalidate my bearish targets, but at this point it looks likely. Accordingly, any camouflaged scalp- or swing-trading should be done from the long side.

The gratuitous spasms of the last two days have not altered the odds of a plunge to at least 1.2689.  The target and its sibling midpoint, 1.3091, are shown in the accompanying chart, which also conveys the weightiness of bear-market selling that has become well nigh irresistible.  With yesterday's head-fake and relapse into weakness, we should now look for the downtrend to accelerate following a two-day close beneath the 1.3091 midpoint.

Is the euro about to turn higher?  We'll be better able to answer that question when we see the rally interact with 1.3306, a Hidden Pivot resistance that can serve as a minimum upside objective for the near term.  I have included a chart that shows the target because the pattern it's associated with is very unintuitive. It's not an ideal place to try shorting, however, due to its close proximity to the November 9 peak at 1.3301. _______ UPDATE (12:26 p.m. ET): The futures blew past 1.3306 effortlessly, suggesting this rally will continue into next week, at least.

Yesterday's 1.3356 low was just 0.0013 points beneath the midpoint support show, but that is sufficient to imply that the now three-week-old downtrend is likely to continue to at least 1.2953, the 'd' target with which it is associated.  There is a lesser but still important support at these levels as well, at 1.3359, and its breach yesterday, slight though it was, is yet further evidence of more weakness to come.  The Hidden Pivot support at 1.2953 can serve as our minimum downside objective for the December Euro, but if and when it is reached, I'll recommend bottom-fishing there aggressively with a tight stop-loss, since corroborating action at the midpoint has been rather precise.

The futures look poised to pop to at least 1.3754, predicated on their success in decisively surmounting a lesser Hidden Pivot resistance, a midpoint at 1.3691.  If they get by the higher number, that would portend still more upside over the near term to as high as 1.3778.  However, even achieving the lesser number will renew the bull trend on the hourly chart, so we should view the action over the next day or two as crucial in determining whether the rally is destined for big things or merely a flash-in-the-pan. _______ UPDATE (9:00 p.m. ET):  The Hidden Pivot target caught the actual high at 1.3785 within 0.0007 points. The futures dove sharply thereafter, erasing the gains from two days and then some.

The Hidden Pivot target at 1.3373 (erroneously given earlier as 1.3773) shown in the chart looks very promising as a place to attempt bottom-fishing with a tight stop-loss. Accordingly, I'll recommend bidding 1.3375, stop 1.3368, day order.  Because the futures have trashed the 1.3574 midpoint, we should also view the target as a minimum downside objective for the near-term. _____ UPDATE: Cancel the bid, since the futures are lifting sharply after having gotten no closer to our target than 1.3444. This is quite bullish and implies that your bias should be toward the buy side if you are seeking for trading opportunities.

There's an easy rally target at 1.3742 to use as a minimum upside objective for the near term, but it seems doubtful bulls won't go the extra inch to refresh themselves with a thrust above dot-like pockets of resistance visible in mid-March and mid-April.  If that's what happens, it'll be telegraphing yet more weakness in the U.S. dollar.