The Euro remains locked in a big consolidation phase and with the Brexit vote coming up I thought I’d take another look. Let’s look at one scenario on the daily chart that I think has some good potential going forward.

We can see the messy price action consistent with corrective phases. As outlined in previous analysis, I expect one last move back down before the final surge into a high that will end the bear rally that began in March 2015. It still may be some time before this bear rally is indeed over.

We are following two broadening top formations - one large and one small. Let’s run through them.

The large broadening top shows point 1 to 4 already in place. Previously, I was looking for the bear rally to end with a point 5 high. I am now beginning to favour it will end with an even more bearish point 7 high. That means price is currently headed up to a point 5 high which should be marginally above the point 3 high set in August 2015 at 1.1714 and is denoted by the upper horizontal line.

Then price would need to come back down and marginally clip the point 4 low set in December 2015 at 1.0540. I would expect this point 6 low to also hold support at 1.0462 set in a March 2015 and is denoted by the lower horizontal line. Then the final surge into a point 7 high would commence.

The small broadening top shows price still tracing out its way to a point 3 high. After that, price should head back down to put in a point 4 low before embarking on its final mission to a point 5 high.

The Bollinger Bands show price has left the upper band and the middle band should provide support if this theory is to be proven correct.

The Fibonacci Fan drawn from the large point 4 low to small point 1 high shows this current move up finding resistance at the 76.4% angle and support at the 88.6% angle. Price is back down near the 88.6% angle and perhaps support will come in once again.

The RSI is in no man’s land while the MACD indicator looks to have just made a bearish crossover but caution always needs to be heeded during corrective phases as there are fakeouts galore.

As for the Brexit vote, as many of you know, I like to “guess” what the announcement will be based on the current technical position. We’ve had success with this before with the Greek No vote to the Euro and some US employment numbers. Also, in my article titled The Sixth Sense Of Markets, produced on 14th April 2015, I suggested the market has a sixth sense and the technicals often provide clues of what the fundamentals will be.

So, what to make of the Brexit vote?

If price is still relatively high then I would expect a vote to leave which would see the Euro trade down into the point 4 and 6 low. It would not matter if this result was expected or not. This is currently my favoured scenario.

If price is much lower, then perhaps the polls suggest a vote to leave is to be expected. If the vote is indeed to leave then price trades down a bit more but as it is expected it shortly thereafter reverses back up, putting the sellers on the wrong side fairly quickly. If, unexpectedly, the vote is to stay then obviously the Euro would surge into the point 5 and 7 high.

So, my technical outlook remains unchanged as long as support holds. Previous analysis has outlined this bear rally to terminate up above the 1.25 level and I expect the Brexit vote to fit itself in to this outlook.