THE BIG PICTURE: A key development is the Bear Trap that occurred at point C where the market failed to break below point A. This suggests that 1.25 is a major level. Strong support presents itself after taking a look at a couple fib extension levels. The first is to measure the low in 2000 to the high in 2008 and project that measurement from the 2012 low. This gives a target level at point D around the 1.64 zone. As for the more immediate price action, symmetry is uncovered when taking the fib extension tool to measure segment wx and projecting that measurement from point y.
THE TECHNICAL STANDPOINT: Failure to follow through after breaking below point A was a great indication that the bulls still have control. Point C was the lowest level that the bears were able to push price before the bulls took over and sent the bears running for the exits. Switching to the lower time frames to anticipate a swing low to develop in the low 1.30s allows for a limited risk.
THE TECHNICAL STANDPOINT: Failure to follow through after breaking below point A was a great indication that the bulls still have control. Point C was the lowest level that the bears were able to push price before the bulls took over and sent the bears running for the exits. Switching to the lower time frames to anticipate a swing low to develop in the low 1.30s allows for a limited risk.
