Finally the major event risk agenda is out of the way. Shortly we will know how much more upside inertia can be achieved with an EWP that is so far clearly corrective; hence it is suggesting that price has not established a major bottom at the June 4 low.

The EUR price structure from the June 1 low can only be “classified” as a counter trend bounce.

Probably, price is unfolding a Double ZZ. The pattern is complex to decode hence I cannot rule out a final push higher towards the 1.2785 -1.2818 area.

If price is able to achieve this additional target then the equity market should also be able to stretch higher an already overbought up leg.

But the main issue here is that the overall pattern remains bearish hence once this rebound is over odds are very large that price should resume the downtrend.

The critical pivot support is at 1.2575

Read more…