The euro looks to have completed its 3-wave major (long-term) downtrend durning November as it fell to a low of 1.11863 before closing the month at 1.13351. Recall from previous analysis the downside target was 1.12905, the 61.8% retracement level of the previous major uptrend from 1.06362 (March 2020) through the high of 1.23490 (January 2021). Also, monthly stochastics established a bullish crossover below the oversold level of 20% at the end of November, a signal the major trend is set for a bullish change. All that is needed now is some sort of confirmation of a new uptrend. This could lead to a few months of consolidation before a reversal pattern is posted.
Theoretical Position: If one is buying the euro near the target level of 1.12905 or November close based on the bullish crossover by monthly stochastics, sell stops could be placed below the November low. This trade is further strengthened by last week’s bullish spike reversal on the weekly chart indicating the secondary (intermediate-term) trend has turned up. The buy price there is near last Friday’s close of 1.13176.
The bottom line is the euro looks technically bullish heading into winter.
