Is it time to Buy the most battered currency …??

With sentiment around the European major bleakest since the time the French and Dutch voted a historic “No” to the EU constitution way back in May 2005, it just may be time to buy the euro as the environment seems perfectly ripe for a surprise rally in the currency pair.



The four hourly chart above clearly indicates divergences, suggesting that the euro may be gearing itself for a relief rally.

From an Elliot perspective the wave counts also suggest that a corrective wave may be around the corner .



If the above wave - count is right and the wave (3) is done with, then euro may be gearing itself for a the 4th wave corrective rally, which in turn can be expected to unfold in a 3 wave fashion. The target zone could be anywhere between 1.2775-1.2990.
Post this corrective bounce, euro could fall to a 1.16 to complete the 5 wave sequence Therefore, this rally can be used to sell euros for the short term.