I’m looking at a pivotal decision in FXE at the moment and it’s based on symmetry or measured moves.
Symmetry is similarity or equality when comparing swings in the same direction. Recently we have started to see a bit of a decline off a key resistance decision in this ETF that came in at the 130.83-131.15 area. This zone included 3 Fibonacci price relationships. There was a 50% retracement of one swing, a .786 retracement of another along with a 1.618 extension of another. We have seen a decline off this resistance from the 130.88 area to 128.39 so far, but now here comes the pivotal decision at the 128.35-39 area.
This support decision on the way down comes from projecting 100% of two prior swings down. One of these swings was $2.49 and one was $2.53. When I projected 100% of both of these swings down it suggested possible support on the way down. Note that so far the recent low has been made $2.49 down from the recent high. This is EXACTLY the same as the prior swing into the 7/24 low ($2.49 and $2.49. So…..this is the way I look at this: If the decline from the 9/17 high is going to continue, price NEEDS to decline below this key support decision at the 128.35-39 area.
If price holds above this same pivotal price support decision (which it is so far) The rally that started from the 7/24 low can easily resume. Bottom line, let’s see what FXE does against this immediate support decision and then trade accordingly! A hold above it gets me to consider the buy side, a break below it gets me to consider the short.