Possible perspectives of the European currencies for 2007

Introduction

The many-month trend of the major European currencies against the dollar has formed a completed wave pattern, which may signal a reversal and a start of a new many-month opposite direction trend. Though this statement requires confirmation. It is based on the reasoned arguments and constant principles under the wave theory and technical analysis (some of them were not released yet).

Any formed or forming Elliott’s wave completion is also a regular bifurcation point, where the price chooses a further appropriate movement.

If to suppose the possible intermediate wave (B) completion, it’s high time to consider the most probable price movement scenarios. Considering the immensity of the pattern wave degree, the bifurcation point influences greatly on the further perspectives of the currency pairs.

EUR/USD

<#IMG13>

If the main variant, the project of which was released about one and a half year ago, confirms, the dollar will strengthen till the end of the year (see picture 1).

The approximate price targets, probable wave patterns and check points of this area are quite clear. There is no need to release them till the downtrend starts.

The main waves (B) and (A) of correction [B] are almost equal, which is the optimal proportion for the waves within the horizontal wave structure. The waves balance on the smaller time-frames was considered in the daily wave analysis for April 18, 2007 (see Final Straight).

<#IMG14>

The alternative scenario is shown in picture 2. Within the framework of this variant the final zigzag (a)-(b)-(c) of Y keeps forming and after the short correction (b) the final upward impulse or the diagonal triangle may occur.

This variant may become the main one and complete the expected wave (B) by the regular check point on 02.06.07.

<#IMG15>

Within the framework of the nearest alternative scenario the survey picture may look so, as it is shown in picture 3. In this case the dollar may strengthen till the end of the year.

<#IMG16>

If the upward movement continues at the larger wave degree than it was considered in the previous alternative scenario, at the end of the year we may expect a large triple zigzag (B) as a part of correctional wave [B], or a diagonal triangle (5) as a finishing pattern of the global upward impulse [A], which has been forming since the middle of 2001.

According to some signs this scenario has much lesser chances to be true at the current time than the ones, considered above. It is treated to be alternate.

2. GBP/USD

<#IMG17>

In accordance with the main scenario the dollar may strengthen till the end of the year (see picture 5).

The main waves (B) and (A) of correction [B] are almost equal (0.78-1.27), which is the optimal proportion for the waves within the horizontal wave structure. The waves balance on the smaller time-frames was considered in the daily wave analysis for April 18, 2007 (see Final Straight).

<#IMG18>

The alternative scenario is shown in picture 6. Within the framework of this variant the final zigzag (a)-(b)-(c) of Y keeps forming and after the short correction (b) the final upward impulse or the diagonal triangle may occur.

This variant may become the main one and complete the expected wave (B) by the regular check point on 02.06.07.

<#IMG19>

Within the framework of the nearest alternative scenario the survey picture may look so, as it is shown in picture 7. In this case the dollar may strengthen till the end of the year.

<#IMG20>

According to some signs this scenario has much lesser chances to be true at the current time than the ones, considered above. It is treated to be alternate.

3. USD/CHF

<#IMG21>

According to the main scenario the franc has formed the truncated double zigzag (B), which may signal about uncompleted pattern or about the forthcoming upward movement. If the main scenario confirms, the dollar may strengthen till the end of the year (see picture 9).

The main waves (B) and (A) of correction [B] didn’t reach equality (0.78-1.27), which is typical of the horizontal wave structure, but are located at the level optimal for the impetuous double or triple zigzags. The waves balance on the smaller time-frames was considered in the daily wave analysis for April 18, 2007 (see Final Straight).

<#IMG22>

The alternative scenario is shown in picture 10. Within the framework of this variant the final zigzag (a)-(b)-(c) of Y keeps forming and after the short correction (b) the final downward impulse or the diagonal triangle may occur.

This variant may become the main one, complete the expected wave (B) by the regular check point on 02.06.07 and form the full double zigzag (B).

<#IMG23>

Within the framework of the nearest alternative scenario the survey picture may look so, as it is shown in picture 11. In this case the dollar may strengthen till the end of the year.

<#IMG24>

If the downward movement continues at the larger wave degree than it was considered in the previous alternative scenario, at the end of the year we may expect a large double or triple zigzag (B) as a part of wide correctional wave [B].

According to some signs this scenario has much lesser chances to be true at the current time than the ones, considered above. It is treated to be alternate.

Note

Given possible trading plans are purely informational purpose only and they should not be considered as trading guides or an invitation to make a transaction.