The euro continues to indicate the previous major (long-term) downtrend came to an end with the November low of 1.11863. November saw the euro rally off that low to close above its downside target price of 1.12905 with activity during December continuing to bounce back and forth across this target. Eventually the euro finished the month at 1.13682. While we wait for confirmation of a new major uptrend, the secondary (intermediate-term) turned up late last week as the euro posted a new 4-week high beyond 1.13822. This new secondary uptrend should, in time, confirm a new major uptrend.
Theoretical Position: If one bought the euro near the November settlement of 1.13351 during December, sell stops would be placed below the November low of 1.11863. Additional long contracts might have been established with last week’s move to a new 4-week high. These positions would also have sell stops below the November low. The initial upside target area is between 1.16305 and 1.17677.
