EURUSD double top at 1,33 or just a pause?

Dow ends year with a bullish bang!
January 1, 2013
The great wedge is closing down
January 4, 2013

EURUSD has made a double top at 1,33 area where it was rejected twice during the last few weeks. The second high was lower than the one made in 18th of December. Although the decline looks impulsive from the second high made in January 2nd, but the first donward move looks like a corrective 3 wave move. Our view as long as prices remain above 1,3040 is that we are currently within a corrective wave as depicted below. The most probable count is that we are currently in wave C and the uptrend will resume strongly very soon. For now prices have found support in the red line and might move lower towards the upward sloping trend line. Ideally wave C should end above or exactly on that line, but it could move towards 1,3040 which is the 61,8% retracement of the entire rally from 1,2870 to 1,33. Breaking that level also will diminish the bulish scenario chances. If you feel bearish and believe the market is set to go much lower, then your stop should in any case be the last high at 1,33 level. Breaking that resistance level, prices will push strongly towards 1,35 and why not higher.

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As always, thank you for taking the time to catch up on my thinking.

Alexandros Yfantis
Alexandros Yfantis
Fascinated by financial markets, studied International Securities Investment and Banking in the UK, works as a Portfolio Manager in Greece and runs a technical analysis website. Enjoys travelling and spending time with his family and preparing for the black belt in Korean Karate.