Looking at the diagram here, we can note that an attempt was made to pass the center of the red circle after the pole bounce on May 30 2010.
This attempt failed misereably by much agitation in the summer of 2011, starting from end of May.
If the center of the red circle can be by passed, this pair will go to 6500, but that is very unlikely given the severity of the pole break of the blue circle downwards at the end of August of 2011.
This pole break has introduced the EUR into a new territory of price action. For the EUR to get back to the inside of the blue circle to continue its journey towards 6500 is virtually impossible before it touches the inside perimeter of the red circle, or come within 300-400 pip distance of that circle at around 2200 zone.
Now we have a pole bounce off the solid black circle at 3150 which is giving the impression of a change of angle of attack if one observes the manner in which the solid black circle is shifting upwards relative to the green circle.
This shift is a fake shift, and its giving the false impression of a new angle of attack of the upward motion that started from June of 2010 at 1870. The reason that is a fake shift is because the strength of previous support is diminishing:
T1 is not really a strong support, because there isnt much points bouncing off it.
S1 is not really a strong support either, because not many points have shown strong bounces off S1, many points have crossed it, but not solid bounces.
T2 is the only strong support, but if you note that any bounce that initiated from T2 had lower highs. P2 is lower than P1, and P3 lower than P2, so chances of another hypothetical point (P4) becoming a new high is very very slim.
Now why has the bounce off 3150 occured?
It occured to pay respect to T2 trendline
BUT...
If you note it is bound by the ceiling that the T4 line has presented. This resistance is also at the outer edge of the blue circle.
This resistance is VERY STRONG, which means that we will start to see the low of 3150 being broken, maybe we are going to slide down T4 to eventually do a pole break of the black solid circle, but the bottom line is that we have reached the limits of a bounce from 3150, and we are missing a touch point for the EUR at the lower part of the red circle.
This attempt failed misereably by much agitation in the summer of 2011, starting from end of May.
If the center of the red circle can be by passed, this pair will go to 6500, but that is very unlikely given the severity of the pole break of the blue circle downwards at the end of August of 2011.
This pole break has introduced the EUR into a new territory of price action. For the EUR to get back to the inside of the blue circle to continue its journey towards 6500 is virtually impossible before it touches the inside perimeter of the red circle, or come within 300-400 pip distance of that circle at around 2200 zone.
Now we have a pole bounce off the solid black circle at 3150 which is giving the impression of a change of angle of attack if one observes the manner in which the solid black circle is shifting upwards relative to the green circle.
This shift is a fake shift, and its giving the false impression of a new angle of attack of the upward motion that started from June of 2010 at 1870. The reason that is a fake shift is because the strength of previous support is diminishing:
T1 is not really a strong support, because there isnt much points bouncing off it.
S1 is not really a strong support either, because not many points have shown strong bounces off S1, many points have crossed it, but not solid bounces.
T2 is the only strong support, but if you note that any bounce that initiated from T2 had lower highs. P2 is lower than P1, and P3 lower than P2, so chances of another hypothetical point (P4) becoming a new high is very very slim.
Now why has the bounce off 3150 occured?
It occured to pay respect to T2 trendline
BUT...
If you note it is bound by the ceiling that the T4 line has presented. This resistance is also at the outer edge of the blue circle.
This resistance is VERY STRONG, which means that we will start to see the low of 3150 being broken, maybe we are going to slide down T4 to eventually do a pole break of the black solid circle, but the bottom line is that we have reached the limits of a bounce from 3150, and we are missing a touch point for the EUR at the lower part of the red circle.