20080906 - EURPLN

The whole situation changed since last post. The EURPLN channel has been clearly broken:



I'm not sure if I trust the RSI anymore, but in this case it confirms breakout nicely, thus I left it in chart (from ChartStation).

What next? It is higher-lows & higher-highs pattern I like and the uptrend line has been tested few times. We have few Fibonacci levels, which can act as resistance. The rally was really unexpected as European Central Bank did not increase interest rates this Thursday. However - market does what it does (as it shows clearly now) and if you have any EURPLN position then just set your stops and wait - momentum is on your side now, but don't forget we are in major downtrend:



The whole move started in March 2004 and the EURPLN has been continuously down (with few significant retracements) for the next 4 years. As for now - we have broken the important resistance line (lower bold green line) and we are heading to the area of 3.5, where is some price-action line and the long-term downtrend line. Unfortunately, Fibo levels are much higher, in case move continues we won't be able to tell if this is correction or major trend reversal.