EUR/USD fractal outlook

[Paul Koszarny]

EUR/USD fractal outlook

EUR/USD was struggling with levels above 1.1900 and twice failed to satisfy the most greedy investors. Last week resembles the Day of His Wrath. Both buyers and sellers were being beheaded. The decapitation coincides with the release of a new Terminator and the long-awaited reprisal by G.W. Bush. A deeper inhale in this environment may produce dizziness and a deeper scrutiny of the charts by a stopped trader serves better than any brand name diaphoretic. The gossip tells that diapers would come in handy too. What really matters is that EUR/USD abounds with numerous opportunities to trade up and down, as you wish, with no sign of abatement of volatility. This is close to the euro fathers’ abdication whose ideal was a firm and stable euro. Firmness is there, but stability is slightly stained. I wonder how well buttoned up will ECB officials present their sound bites this week and should they leave the rates unchanged are they going to take to the bush. In the meantime EUR/USD seems dirt-cheap. Anybody cares for a few lots to buy? The hourly road dips sharply and I wonder if this big figure which I can see now is more disconcerting than enthralling. Why, it’s as good as it was on May 28 and May 29. Or maybe I am wrong. Today is June 2, a new month with a new outlook and the big figure may not exact any click on the keyboard yet. The market was impervious to signs of overextention. Still persist bearish divergences on weeklies and dailies. Weekly prices have not even been sucked into Bollinger bands yet. Are you worried about this bearish gap? It would be opportune to say that 1.1820 may be a wishful thinking and we should recalibrate models to lower levels, something to the tune of 1.1598 for example. I would not belittle the formation of certain fractal structures. Not one, not two and not three are there to validate someone’s will. George Soros disclosed his positions with eyes wide shut. Wily recommendations which served the turn. Whether it’s a reversal too we need to keep eyes wide open. In all seriousness Tuesday is a fractal day where a new local extreme may develop, possibly a new low in this dire and gruelling trend.