I want to explain a bit more clearly why I am expecting a 500 tick rally in the Eurocurrency.
The daily chart above shows the bear market boxes for the September futures as well as the divisions of the historical range from the 82.45 low in October 2000 to the high at 136.87 last December.
As you can see the market is close to the bottom of its second bear market box at 117.83. It is also close to the 2/3 division point of the historical range at 118.73. The 7/8 point of the bear market box is at 119.02 while the market recently bouced off 118.90, the 1/2 point of its current hourly box.
All in all the September eurocurrency has dropped to strong support and a rally of at least 1/2 a bear market box (476 ticks) is likely now. Such a rally would take the market back to the 3/4 division point which now will act as resistance.
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