The steep angle of the gains means we can expect a good pull--back over the next few days.
By George R. Harrison
The latest surge in up-swinging EURO prices is likely to take brief pause for at least a few days and pull back down in price a bit
There's presently a strong price support at the 1.1050 level which should hold as long as the latest price trend momentum is in place.
Should prices break below 1.1050, then, price trend can be expected to go lower for a week or more.
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The Stock Market has expended a lot of energy in it's upwards climb since the election.
To assimilate this upwards price action, markets need to pause to re-energize and consolidate the recent price moves.
The trend has shifted to sideways which is essentially nothing more than a non-trending market state.
Whether the market breadth is for 30 stocks (the Dow), 500 stocks (the S&P 500 index) or the larger 2000 company group represented by the Russell 2000, we see the same action displayed: A consolidation or sideways trend is in process following our recent strong upswing in prices.
This, however, is not just a local market phenomena. By examining the Japanese Stock Index, we find the very same type of activity: a pause in upward momentum.
I've provided a few price points to watch in the Nikkei and the Dow in the charts to the left.
It would not be out of line at all for the markets to pull back like a spring and then launch upwards to new highs.
One needs to allow a certain amount of price movement (which is derived from some formulas I've learned over the last 45+ years of studying WD Gann's materials, clues & rediscoveries) in order not to panic when prices pull down from their present high points.
Locating critical price levels for highs and lows as well as highly probably turn dates are really some of the most sought-out tools that traders wish for.
Predictions can be made very accurately, but, one must first put away faulty assumptions and teachings. - George
Here's a quick rundown on some price points of interest in the Euro for the next few days.
We're close to a price break down point at the 1.0520 level.
Note the upper green line. Unless price rises and closes above 1.0637, don't consider it a trend.
Click on chart to enlarge for clarity.