With the intense drama of the U.S. elections – described by many as the most nerve wracking election in the recent history of the United States – it’s not very surprising that the market has had a couple of very interesting weeks as well.
It began with the euro’s sudden, swift rally of nearly 500 pips, which included the biggest single-day action we’ve seen in several months. This was immediately followed by an even more massive decline that wiped out all of the preceding rally, and then some.
Right now the odds are stacked in favor of the long-term bearish scenario. But it’s still early days to be sure, and there’s a definite possibility that this is nothing more than a whiplash of volatility within a remarkably prolonged consolidation phase. It’s interesting to note that both of these higher-probability counts are ultimately bearish.
We’re focusing this week on discussing the larger picture over the long term, and so our targets reflect this larger timeframe. Hopefully next week there will be enough new data to calculate more useful (and trade-able) targets.
We’re updating our counts to reflect the most recent price action and to present tighter targets and invalidation points.