Is the Euro getting ready to turn lower?

The past few weeks have been a little aimless for the EURUSD. - Since the sharp drop in the EURUSD on the 11th August (from 1.3160-1.2830) the EURUSD has ranged pretty much between 1.2600 to 1.2900. In that time I had thought we were going to rebound back into the low 1.3000s, however the set-up I was looking at never followed through, and the EURUSD has since sunk back into this extended range. - Now with pressures re-emerging on the periphery of the Eurozone (see the lower part of yesterday's post here) I believe the risk may be once again switching to the downside for the Euro.

On the technical front, the moves on the EURUSD over the past couple of months and weeks have manifested as 'Expanding wedges',which may be indicative of further lows ahead for the EURUSD. - I have some doubts as to the validity of the larger Expanding Wedge due to the way it has formed mostly along the upper line of the pattern. However, the way the smaller pattern has consolidated the breakout, does suggest that this pattern may be valid. The chart below highlights these patterns.

Should the EURUSD start to breakout and hold below the base of the mini-pattern and the recent 1.2600 low, then there is a chance that a deeper and more prolonged breakdown in the EURUSD. - The next chart shows the monthly EURUSD, I have highlighted 2 significant features of this chart. The first feature is the large Multi-Month broadening pattern, (as I have mentioned before these broadening patterns are very difficult to trade signals off, however they can point to where strength and weakness lies), this pattern suggests that in the much bigger picture the direction for the EURUSD is going to be much lower. The second feature of this chart is the Andrews Pitchfork, this also points to weakness ahead, the pitchfork as a potential signal is bolstered by the fact that the upper line of the pitchfork held the recent high near 1.3300.

I am not altogether sure that this is ready to break down quite yet, however I do think that the bearish signals, technical and fundamental, are starting to stack up. This is something however I will keep an eye on for a possible break in the not too distant future.

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On a different note, a few weeks ago I posted my 10 favourite trading books (can be seen by clicking here).  I was however amused by a posting on the BNET blog by Geoffrey James where he presents his view of  'The 10 Worst Business Books of All Time'. It is worth checking it out for some amusement, btw the winner was 'Leadership Secrets of Attila the Hun'.  Yep you read that correctly.....