EUR/USD - New Maximums, Then What?

Today EUR/USD renewed its long term maximum once again - 1.3842 is the highest rate since the November 1995. The lack of important economical releases for this day didn't stop EUR/USD bulls from holding Euro above the crucial 1.3800 mark. But how will EUR/USD behave in the near future? Will it go for 1.4000 and then for the new absolute historical maximums? Or will it just stuck in the 1.3800-1.3900 range until the bearish force will pull it down? Let's look at this EUR/USD weekly chart:

Don't be confused with the red arrow - it's just a purposed direction for the next medium term market movement. As seen on the chart a "W" formation of the Wolfe Waves theory can be clearly recognized within the first 4 red-marked waves. The next wave should follow as the correctional for these four. Looking at the chart this forecast is quite obvious. But I am almost sure that before the correction will start (which in my opinion will last for 4-5 weeks with the bottom around 1.3600) current bullish wave will live for another one or two weeks leading EUR/USD to around 1.3900 level. But nevertheless, even if the above mentioned correction will take its place, the further EUR/USD behavior is more bullish-orientated with the possible 1.3400-1.34500 targets by the end of 2007.

Possible EUR/USD Reversal?

Jamie Saettele, Technical Currency Analyst of DialyFX suggests a soon EUR/USD reversal movement considering several Forex technical factors that can influence traders in the next few weeks. Saettele lists several Resistance levels which might appear to be quite impassible for EUR/USD bulls, while providing more in-depth technical analysis to prove his point. To read more of Jamie Saettele's article click here. I've tried to apply my own analysis combined with Wolfe waves theory and have came to the conclusion that the major turning point in EUR/USD is quite possible to happen this week:

Point "5" (see chart) is the point after which the strong bearish must follow. This wave (according to Wolfe waves rules) will last until it reaches a cyan line which goes through points "1" and "4" - this is 1.2700-1.2800 level, which is quite far below. Nothing can be guaranteed on Forex market, but I think that we've got a good probability of some bearish movements on EUR/USD.