The diagonal has been fully retraced (began at 1.3333) and then some. In fact, the EURUSD has exceeded the 50% retracement of the decline from 1.4723 and is closing in on the 61.8% at 1.3811. The 200 day SMA (not shown) is at 1.3907 today and sloping down. There is a zone that I am showing on this chart with horizontal lines defined by 1.3594 and 1.3959. This is the First of Year (FOY) pivot zone and is calculated with the first two weeks of yearly data. This level tends to define the trend for the year. I’ll be looking to short over the next several weeks in this zone. Also, move risk on existing longs to 1.3530 and place a limit to take profit at 1.38…the EURUSD has advanced for 8 consecutive days now so risk of at least a pullback (even a top) is increased. IMPORTANT: the longer term trend is still viewed as down since the decline from 1.4723 is an impulse.
