It seems that the EURO wants to continue its ascent that started in November 2005 but has arrived at an interesting decision point. Since it was at 1.1650, the pair has been on the most impressive climb that any financial assets can have.
Only the last leg up, starting at 1.49, seems a bit "vertical" but in general the whole move was a nice 45 degree angle, which is a sign of great bullishness.
The ebb and flow of the pair gave us 5 possible waves up (blue numbers), while the last one is still in development. In the attached weekly chart, we can see the following TA details to assess our possible positioning in this currency:
1. The whole move is contained in the general upward channel (in black) while most of the action and reaction points sit on parallel lines of the channel boundaries.
2. In the weekly overall view, it seems that the last wave (5) has some way to go before it will top out. The possible ends should be points on the parallel lines of the up trend line that stopped wave 3 and the last top at 1.60. These lines (1 and 2 in mauve) look very excessive but everything can happen in these hard times of financial crisis. Trichet's stance on inflation is pushing this pair to values that nobody thought about before.
3. On the other hand, many traders look at the whole bull market here as completed. For them, we have drawn the possible retracement levels of the whole campaign. Look how well the Fibonacci percent levels sit near previous areas of large activity (support-resistance). Some of them are even where we have placed the end of the whole waves construction (3 and 4).
Conclusions:
We look at this pair with amazement. Then, we have two scenarios: Bulls, that look at the current price action as a small corrective phase inside wave 5 (that should bring the price near its 200 DMA or previous lines, blue, black or 3 in mauve by an ABC series). Bears, that look at the whole move as finished and wait for a serious retracement to relief the long awaited USD crash process.