EURUSD - At Long Term Symmetrical Low

THE BIG PICTURE: The recent low established at the beginning of January 2017 provides an important indication that the down move is finding exhaustion. After a considerable amount of time the euro has reached a point of important interest. A long term low appears to be forming with a bear trap on the quarterly chart. Notice that the segment from A to B can be measured and projected from point C to provide a target at point D. Both segments have moved to the tune of just under six thousand pips, however the while the second segment has taken longer to form it did not make as deep of a retracement from a percentage basis. Again the fib extension tool can be used to measure the segment from A to B and projected at point C to provide the forecasted low at D. Notice that the 100% level on the fib extension tool places a level of support at 1.0461 which was violated marginally. Also notice that the low established in January of 2015 was not violated by much at the beginning of January 2017. This is very telling from a bullish standpoint since the low from 2017 is barely lower than the low established in 2015 by less than two percent.

THE TECHNICAL STANDPOINT: Considering the evidence at hand, it would not be prudent to anticipate a major level of support to develop just above the lows of January 2015 and 2017. As long as the market stays above these important level then the probability of a move to the upside grows. Keep an eye on these levels for bear traps similar to that of January 2017 and be on the look out for bullish price patterns to develop on the lower timeframes.

Comment:

After a move off of the aforementioned level, the Euro is entering into a point where profit taking should be expected from a short term standpoint. The dollar at this point has reached a level of support and start to move higher on a short term basis. This will cause the euro to give back some of the gains but provide those who did not take the initial entry in the euro a second buying opportunity as the market tries to take the euro back down toward the 1.10 level. This will enable the bulls to add to their positions and even have traders suggesting the the euro will move back toward parity. Another bear trap will ensue thus faking out everyone and again there will be a higher low established before price moves back toward the levels it is at today.