EURO 1-4-12

EURUSD failed to make a bullish breakout in May of 2011 then reversed to the Zone-Trader Pivot as was expected.  Whenever a market fails in either direction it reverts back to the Point of Control or the Zone-Trader Pivot.  Then in the beginning of November 2011 EURUSD signaled that it would begin to make an attempt at a bearish breakout and continue selling off towards MS1 at 1.28733.  In the last trading week of the 2011 year EURUSD touched MS1 at the 1.28733 price level and initially found some support.  The first week 2012 the weekly candle tested the high of the prior week at 1.30826 and was not able to make new highs and has now begun to sell off back towards the the low of the prior week and the 1.28733 MS1 price level.  The next couple of weeks including this one are important for the future direction of the EURUSD. If EURUSD takes out the low of the prior week and breaks the key support of MS1 on the Yearly Profile continue to take shorts and look for this market to attempt to test the midpoint between MS1 and MS2 on the Yearly at 1.22350, EURUSD will need to get a candle body close below the midpoint on a weekly candle in order to make a bearish breakout and continue the downtrend.  If EURUSD is able to make a bearish breakout look to sell retracements as this suggest that EURUSD will take another leg to the downside.  Now that EURUSD has touched MS1 1.28733 if we see a close on the weekly candle higher then the high of the prior candle then this signals a failed bearish breakout and we then look for buys and for EURUSD to reverse back to the Zone-Trader Pivot or Point of Control at 1.39070.  This is the current analysis for the Yearly Profile which is the long-term perspective.  Don't make the mistake that most short-term and day-traders make and ignore the big picture.  Long-term overpowers short-term and it is crucial to understand where the market is in the big picture then look for short-term trades to align with the direction being suggested by the short-term.