Market Forecast for 08-02-12

EUR/USD: The Euro completed a beautiful 5 wave decline into our time price area. Now it has rallied as expected and set up what looks like a perfect buy, into an upside down head and shoulders pattern.

You can use the intra-day chart to get long on pullbacks or buy a later break out as follows:

BUY 1.2310 stop to open, use 1.2220 stop loss, move to break even at 1.2365. Cover 1/3 of the position at 1.2489 limit, cover 1/3 at 1.2696 or trail stop and cover 2/3 at 1.2758, the target of the head and shoulders measured move (my target is actually a little lower to give us some wiggle room). See daily chart of the Euro below with the complete analysis.

euro eurusd daily chart with analysis

EUR/JPY: Buy Euro-Yen at 96.35 stop to open, use 95.75 stop loss, move stop to break even at a price of 96.65. Cover 1/3 of the position at a limit of 98.40, cover 1/3 at 99.10, and trail stop to each subsequent target util out with a limit of 100.20 is reached or you're stopped out at the trailing stop. See daily chart below.

euro-yen daily chart

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