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EUR/USD down 100 pips off its high
Today the traditional pieces of the market puzzle - currencies, stock indices, gold, copper and oil did not tally. There was a segment of weird behavior and no doubt the recent developments on the dollar market is a clue to this little chaos. Fortunately, volume is one of few tools which does not cheat and when I was discussing things in the morning I asked myself and others what to trust. Eventually I came to a conclusion that the biggest risk is not to trust volume. So with the help of stock markets I found exuberance in EUR/USD at 1.0960 and false price movements on stock index futures. The result is a long position on Warsaw futures at 1121 (today's close 1134) and shorts on EUR/USD which is off its local extreme about 100 pips now. The pattern of today's hourly wave from the top is a Fibonacci type. The first impulse 8-hour long retraced 50% in the course of three hours, the bottom of the impulse broken and slides extended to 50% of a future multiplied wave ending at 1.0770. At the moment EUR/USD is hovering slightly above 1.0870 and the daily candle in the whole context looks really bad.
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