I posted on EURUSD and promised to bring a follow up post with possible trades if I see any.
Before that I would like to show you something interesting I found in my research a while back that keeps standing out to me.
Just to put it out there again, in general EURUSD should have promising price action in the decade to come, but in the medium term I am a bit skeptical as always. If I'm proven wrong with this, with no emotions in play, I won’t take it into consideration further. There are other indicators that show more bullishness to come in the medium term, which might turn into long term, but who really knows.
So anyways, DUBIOUS to say the least, let me explain what's on the chart you see. Have a nice read, because this will be interesting and probably (WITH PROBABILITY) valuable.
I have looked around from many many years of this pair's price action, but one point in time stood out to me as it looked very similar to what we see now. I had this idea a while ago, but wasn't sure if it would play out similarly or not. Turns out, it looks more similar even now. I had the time period marked for re-evaluation and would like to point it out, enjoy.
On the chart I have 6 different moving averages on the Daily timeframe.
For reference:
White - 25 SMA
Yellow - 50 SMA
Orange - 100 SMA
Blue - 200 SMA
Usually in Bull markets the highest MA in this case the 200, will always be below other lower MA's and vice versa for Bear markets. In this case I’ll be referring to them as Bull/Bear steepeners.
I also have what is called the BMSB or BMRB as in "Bull Market Support Band" or "Bear Market Resistance Band," consisting of the 20W SMA and the 21W EMA.
This band helps price stay running high by bouncing off of it (retesting for support). In the case price falls below it and fails to get above it, the band turns into resistance, (price rejects off it).
The screen shot on the top is from the price action of this pair from July 2011 to January 2012.
Now what's all similar?
Let me explain the process of both (price actions) and (MA's) in both cases, splitting both time points into 2 sections.
Section 1:
1. We saw the EURUSD have a low in 2010 after a steep downtrend, price was below all MA's mentioned with a bear steepener. The BMRB was above price.
2. Following the low of 2010, price had a very decent run of 25% for about a year, moving above the MA's flipping to a bull steepener. Price kept bouncing off of the BMSB after getting above it and retesting for support during the start of the run.
3. Then, after a local high was found, price consolidated for about 120 days. Continuing to bounce off the BMSB (even falling below it a multiple times) but rallying above it thereafter, price met its fate when it fell below and couldn’t get above it, leading to new 37 week lows.
4. After the price fell about 10%, it rallied to the BMRB (even peaking slightly above it). During this time the 25 MA was getting above the 50 MA and the 200 was getting above the 100 MA.
5. Shortly the 25 MA failed to hold above the 50 MA as price rejected from the BMRB. EURUSD fell about 11%, making a lower low, following after came a lower high then another 10% drop from there. The total from high to low was about 15%.
Section 2:
1. In 2022 after a steep downtrend we found a low, price was below all mentioned MA's with bear steepener formation. The BMRB was above price.
2. Following the low in 2022, price had a very decent rally of around 18% for about 6 months, moving above all MA's (bull steepener) and price kept bouncing off the BMSB after getting above it and retesting for support during the start of the run.
3. After a local high was found, price consolidated, even making new local highs in a big range of about 170 days. Price kept bouncing off the BMSB, even falling below it once, before rallying higher. Price then met its fate, falling below the BMSB, rejecting off of it and making a 42 week low.
4. (Currently) After the price fell about 7% from highs, it rallied to the BMRB (even peeking its head slightly above it). During this time the 25 MA has crossed above the 50 MA and the 200 crossed above the 100 MA.
Now they do say “History doesn’t repeat itself, but it rhymes”. Again, price can keep rallying upwards, even fall to retest the BMSB and continue higher, making my few hours worth of writing thrown away, but anyways it is interesting to see and I wanted share it with you.
I’ve done the job of explaining what I found, the rest is on you to decide, though I will be following up with trade setups, again if I see any. Would also like to hear any thoughts anyone might have. Always trade at your own risk.
Also, PS. the MA's don't match on the Weekly time frame only on Daily.
Good luck and have good trading days to come.
EURUSD
EURUSD
GBPUSD
GBPUSD
DXY
DXY
Before that I would like to show you something interesting I found in my research a while back that keeps standing out to me.
Just to put it out there again, in general EURUSD should have promising price action in the decade to come, but in the medium term I am a bit skeptical as always. If I'm proven wrong with this, with no emotions in play, I won’t take it into consideration further. There are other indicators that show more bullishness to come in the medium term, which might turn into long term, but who really knows.
So anyways, DUBIOUS to say the least, let me explain what's on the chart you see. Have a nice read, because this will be interesting and probably (WITH PROBABILITY) valuable.
I have looked around from many many years of this pair's price action, but one point in time stood out to me as it looked very similar to what we see now. I had this idea a while ago, but wasn't sure if it would play out similarly or not. Turns out, it looks more similar even now. I had the time period marked for re-evaluation and would like to point it out, enjoy.
On the chart I have 6 different moving averages on the Daily timeframe.
For reference:
White - 25 SMA
Yellow - 50 SMA
Orange - 100 SMA
Blue - 200 SMA
Usually in Bull markets the highest MA in this case the 200, will always be below other lower MA's and vice versa for Bear markets. In this case I’ll be referring to them as Bull/Bear steepeners.
I also have what is called the BMSB or BMRB as in "Bull Market Support Band" or "Bear Market Resistance Band," consisting of the 20W SMA and the 21W EMA.
This band helps price stay running high by bouncing off of it (retesting for support). In the case price falls below it and fails to get above it, the band turns into resistance, (price rejects off it).
The screen shot on the top is from the price action of this pair from July 2011 to January 2012.
Now what's all similar?
Let me explain the process of both (price actions) and (MA's) in both cases, splitting both time points into 2 sections.
Section 1:
1. We saw the EURUSD have a low in 2010 after a steep downtrend, price was below all MA's mentioned with a bear steepener. The BMRB was above price.
2. Following the low of 2010, price had a very decent run of 25% for about a year, moving above the MA's flipping to a bull steepener. Price kept bouncing off of the BMSB after getting above it and retesting for support during the start of the run.
3. Then, after a local high was found, price consolidated for about 120 days. Continuing to bounce off the BMSB (even falling below it a multiple times) but rallying above it thereafter, price met its fate when it fell below and couldn’t get above it, leading to new 37 week lows.
4. After the price fell about 10%, it rallied to the BMRB (even peaking slightly above it). During this time the 25 MA was getting above the 50 MA and the 200 was getting above the 100 MA.
5. Shortly the 25 MA failed to hold above the 50 MA as price rejected from the BMRB. EURUSD fell about 11%, making a lower low, following after came a lower high then another 10% drop from there. The total from high to low was about 15%.
Section 2:
1. In 2022 after a steep downtrend we found a low, price was below all mentioned MA's with bear steepener formation. The BMRB was above price.
2. Following the low in 2022, price had a very decent rally of around 18% for about 6 months, moving above all MA's (bull steepener) and price kept bouncing off the BMSB after getting above it and retesting for support during the start of the run.
3. After a local high was found, price consolidated, even making new local highs in a big range of about 170 days. Price kept bouncing off the BMSB, even falling below it once, before rallying higher. Price then met its fate, falling below the BMSB, rejecting off of it and making a 42 week low.
4. (Currently) After the price fell about 7% from highs, it rallied to the BMRB (even peeking its head slightly above it). During this time the 25 MA has crossed above the 50 MA and the 200 crossed above the 100 MA.
Now they do say “History doesn’t repeat itself, but it rhymes”. Again, price can keep rallying upwards, even fall to retest the BMSB and continue higher, making my few hours worth of writing thrown away, but anyways it is interesting to see and I wanted share it with you.
I’ve done the job of explaining what I found, the rest is on you to decide, though I will be following up with trade setups, again if I see any. Would also like to hear any thoughts anyone might have. Always trade at your own risk.
Also, PS. the MA's don't match on the Weekly time frame only on Daily.
Good luck and have good trading days to come.
EURUSD
EURUSD
GBPUSD
GBPUSD
DXY
DXY
