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The EUR USD looks good to me right now for a setup of a continuation move higher soon. Since the March 2009 bottom, the Euro has had quite a constructive rally with a large sell off and then a smaller selloff to define what I would call a pretty stable uptrend.

But more than that it appears also that we may have what looks to be the makings of a cup and handle pattern in the EUR USD. The cup being almost 6 months long, and the handle being formed right now and maybe about 1 month long. If I am correct that this is a cup and handle pattern, then we could be looking at a move coming up which could serve about 1500 pips to the upside. Certainly that would be a very nice move but is it going to happen?

The current trend is up as I have already stated so we have that on our side. Secondly, and this is going to be a lot harder to explain, there was a very important cycle date which occurred on April 20th, 2009. You can see that the Euro declined down into that date and then turned hard in a very substantial move up. Similarly, the US Dollar Index also hit the April 20th, 2009 Marty Armstrong cycle date and then turned down from it.

That cycle date of April 20th, 2009 was a very important cycle date on the Marty Armstrong cycle model. I have seen his turning points be VERY precise and you can see the Euro and US dollar index reversing right on the date is once again proof how powerful his cycle model really is.

The fireworks could really start in earnest on a move in the Euro ABOVE 1.4177

The fact that prices turned on the cycle date is significant to me because it says to me that a significant change in trend has occurred and that we can expect prices to continue in the opposite direction of the direction that was occurring preceding the cycle date. So in the case of the US dollar Index, I expect us to see a hard move DOWN. And in the case of the Euro, I expect to see a hard move UP.

I will probably post a chart tomorrow of the US dollar index because it does seem to be at a very crucial juncture right now.

This is a developing story. More to follow…