First off, Happy Holidays to all! Now to some analysis on the EUR/USD day chart using Elliot Wave. If you have a look at the attached chart you will see that the 50 day sma is above the 200 day sma, yet price action dropped below the 200 sma and has since moved back above the 200 sma. What does this indicate one might ask, caution is the answer. As the wave count indicates we could possibly be at the conclusion of wave 2 in continuation of the most recent uptrend, on the other hand it could also be the start of a downtrend where wave 2 is actually wave 1 in the continuation of the longer term downtrend (the one that started a year ago). At this point it is really hard to determine which way the market will go. Typically, in December, currency pairs either make a new high or new low for the year. Of the two scenarios, a new low would seem the most logical as it is the closest; however, this year could very well be an exception to the rule, and neither a new high or new low may be established. I prefer to stand aside and wait for the trend to develop further before jumping into the market. I tend to trade larger time frames and hold my trades for longer than 1 day, so please keep that in mind when making your trading decisions. A break above the small green b on the chart would signal that wave 3 of the uptrend has started, whereas a break below the larger yellow b would signal wave 2 as indicated below is actually wave 1 of a downtrend resumption after a three wave correction.