USD Index:- Primary and Secondary cycles
The end of the 2010 Primary cycle, and we begin a new Primary cycle for 2011 in a bearish trend.
USD index is currently below the 2011 50% level, therefore the overall trend bias is to move lower, with minor intermediate and lesser cycles providing short-term counter-trend moves from support levels.
Euro Yearly and monthlyThe euro will begin 2011 above the Primary and Secondary 50% levels...
therefore the trend bias is up..
first target is the 3-year 50% level, and above that it's the 3-Quarterly highs.
To confirm further gains towards the highs, price needs a weekly close above the January 50% level and single monthly high @ 1.3544.
if for some reason there's weakness in the first Quarter for 2011, then support levels are based on the 3-Quarterly 50% 1.3180 (single monthly lows @ 1.3090)
if the euro moves down into those levels and find support, then it could provide a THRUST pattern upwards for the rest of the Quarter.
Euro Weekly and 5-day pattern
Because there is a breakout of Friday's highs, I don't have an expectation that next week will begin with a 2-day reversal pattern...
Next week is simply defined by the weekly level @ 1.3375
AUD Yearly and monthly
Trading above the 2010 highs @ 97.86 should continue to push up towards the 2011 highs @ 1.0612
a number of resistance levels in 2011 :- 1.0612 & then the .618 of the Yearly range @ 1.0871
The Primary cycle is a long time, therefore we continue to focus on the lesser timeframes (Monthly and Weekly), whilst looking for trading set-ups using the 5-day range and the Weekly levels.
My view was for the AUD to continue higher in the first Quarter for 2011, with the most robust setting using the 3 week lows as support (late December or early January)
In the short-term, the trend remains up, as long as price remains above the Weekly level @ 1.0132.
There is a breakout of Friday's highs, which should continue to push up towards the Weekly highs:- break and extend pattern from last week's highs @ 1.0111
Trend guide:- 1.0208, 1.0222 on Monday
If below the Weekly level there is still the possibility that price moves down and finds support at those 3-week lows @ 98.93
My preferred pattern would be price coming down from next week's highs into the Weekly lows first before the January highs have been reached @ 10367
If the January highs @ are reached first without moving down into the Weekly lows, then the support levels will differ later in the January, as they won't be as valid.
January's highs completes the 2nd month wave pattern from the December 50% level.
