The range has narrowed considerable in just the last week, so a break is due shortly. There is roughly equal argument for the direction of the break. The next 48 hours or so should give way to the range break-out.

The ascending trend-line appears to be containing the current price action. It should be respected as reasonable support.

Please visit:

http://www.fxstreet.com/technical/analysis-reports/fx-weekly-report/2009-11-15.html

What should be observed then is 1.4626.  This may be an important support.

Let’s see if a new Chanel is indeed forming.

The question now what to do next.

1. Wait for a break lower and pick a point higher in the price action as a stop OR

2. Consider a buy with the current low as a stop or wait for another 4 hour candle to close and consider it’s low as a stop…

3. Or as we are near the old top; stay on the sidelines until we break out further as at this point the daily range is also mid-channel.

In my opinion, any new highs at the top of the channel around 1.51 would require re-evaluation to look for selling opportunities.

In between at current levels is the hardest place to assess.

The pattern is not a clear 5 wave up. It is difficult to access the pattern at this time on the lower time frames at the market is so volatile that nice clear waves are not evident.

The alternate possibility is an ABC up. This presents two scenarios. One is a correction and the top is in place. The other is it is wave 1 of a 5 wave ending diagonal.

All three potentials suggest at least a correction down somewhere in the current price range. With the uncertainty however it means the high may be broken.

The index has made a new low, which now opens the door to a reversal.

A final thrust lower is always a possibility however a turn here could signal a potential end to the trend. Be patient and wait to see if a USD bottom appears to form.

Most USD pairs may be forming tops. Look for some sort of blow off or obvious reversal pattern.

http://www.fxstreet.com/technical/analysis-reports/fx-weekly-report/2009-11-09.html

The price on the index currently sits at the .618 retracement so much lower and the old bottom may be eclipsed whereas a turn at current levels would be typical of a 1-2 in Elliott Wave terms.

If we make new lows on the index I would expect another sudden reversal back up. We may find the market choppy and volatile for the rest of the week until we settle this trend change.