USD-Index - After breaking above the Inverted S/H/S bottom neck-line at 81.63 we have seen a back-test of the neckline, which held with success. All we need now to confirm the next rally higher towards the S/H/S target near 91.61 is a clear break above 83.56.
EUR/USD (Monthly) - Since the low in March 1985 EUR/USD has been locked in a wide rising channel. The rally of the bottom in 1985 to the high in 1992 was copied of the 2000 low to the 2008 in both time a length. In May 2012 the 11 year support-line for the 2001 low was broken signaling a shift in sentiment towards the downside and calling for a decline towards the channel support-line.
EUR/USD (Daily) - Since the 1.6038 high in March 2008 we have been working our way lower in a big A-B-C correction. After finishing the big B - wave Triangle in late October 2011 we should continue lower in a impulsive C - wave towards par longer term.
We are currently in wave 3 down from the October 2011 high. Third waves is normally the most powerful and dynamic of the impulsive waves.
As can be seen on the chart above strong support will be encountered in the 1.1661 - 1.1898 area and we should expect this support to provide a bounce in price it should just be a matter of time before the support-area between 1.1661 - 1.1898 gives away for a continuation lower.
EUR/USD (4 Hourly) - Looking at the sub-waves we are currently correction green wave iii in green wave iv towards support in the 1.2362 - 1.2404 area, which should set the stage for green wave v down towards 1.2122 as the first target for green wave v.
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