Market Forecast for 11-15-12

EURUSD: You should have taken 1/2 profits on the Euro shorts and then been stopped out of the remaining positions with a huge gain from the top.

The Euro put in a "tradable buy (low)" on 11/14/12 as we expected would occur. On November 12, we stated, "…within the next 4-36 hours….look to the 60-minute trends for reversals and a potential buy on 60 and 240-minute chart pullbacks if trends begin to slope upward."

OK, now if the Euro has made a tradable low, what kind of low is it? The market will likely pullback within the next few hours for a day or so, then it will EITHER take off to the upside with more speed than we have seen, in a Wave-3 advance, where we would then see acceleration in the middle of each wave up. Or, on the other hand, if the pair fails around here and makes a new low, then that would likely provide EURUSD with a more decisive 5-wave decline, indicating it will be in a bear market for some time to come, but will still have a strong yet harder to trade corrective rally immediately following this potential quick low.

The wave structure over the next 5-7 days should, like in stocks, clear up the 1-3 month trend picture.

ACTION: Trade short-term using 30-60 minute trends for the next few sessions until we get a clearer picture of the next 1-3 month trend. See weekly and daily charts below.

euro weekly chart 11-15-2-12

eurusd daily chart 11-15-2012

EURJPY: The Euro-Yen pair hit profits target for 1/2 short position and stopped out of the remaining with a nice profit on the trailing stops.

From that low, the EURJPY has had a beautiful 5-wave advance and looks like it will have tradable pullback for short-term traders beginning either now, or after one more quick high. From there, it gets VERY interesting.

Look at the weekly charts. We are testing a major downward (see below) trend-line. Should the market close above the trend-line, that would portend a potential move to around 117, the automated pattern price target! That is a huge move if we get a sustained breakout. BUT, we do not yet know for sure if the breakout will occur. This very bullish looking 5-wave advance that just took place gives 60/40 odds that it will break to the upside after a pullback.

ACTION: Trade EURJPY short-term using 30-60 minute trends for the next few sessions until we get a clearer picture of the next 1-3 month trend, especially if the upside breakout occurs. For now, consider fading the uptrend for a pullback into the targets of 103.18, 102.75, and 102.38. See weekly, 4-hour, and 60-minute charts below.

eurjpy weekly chart for november 15, 2012

eurjpy 240-min chart 11-15-12

eurjpy 60-minute chart 11-15-2012

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