EUR/USD Wave Analysis for March 8, 2012

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Wave marking analysis:
Yesterday’s trading operations did not affect much the formed wave picture of the EUR/USD pair. The price changes took place within the range 1.3100-1.3160. Therefore, we can assume that the pair began the formation of the wave B within the scenario of the further development of the downside correction. If that proves to be so, then in the course of development of the wave B the price is likely to return to the limits of the ascending channel. This will enable the continuation of the descending movement to the level of the figure 30. At the same time, according to the several indicators, the euro is still able to resume the growth to the February’s highs.

Targets for the descending movement within the wave A (If not completed):
1.3098 – 76.4% according to Fibonacci
1.3035 – 88.6% according to Fibonacci

Targets for the variant with the wave B:
1.3173 – 61.8% according to Fibonacci
1.3233 – 50.0% according to Fibonacci

General conclusions and trading recommendations:
At the moment the new descending part of the trend is developing though it is quite complicated to define exactly, which wave has been forming. Perhaps, this is the wave A of the prospect continuous downside correction. The current descending movement has downside targets 1.3098 and 1.3035 corresponding to 76.4% and 88.6% of Fibonacci. The wave A is likely to complete its formation (or has already completed) beginning a new ascending movement within the wave B with targets 1.3173 and 1.3233 which is equal to 61.8% and 50.0% of Fibonacci.