DanV
Long

EURUSD - Likely to Resume Uptrend

FX:EURUSD   Euro Fx/U.S. Dollar
1465 26 14
Many notable Banks, Fundamental & Technical Analysts have been calling EURUSD             lower almost ever since it formed significant low in July 2012.

Many have been focusing on what looks like rising wedge which if correct then on completion it would implicate bearish action to at least price retracing to the beginning of the wedge.

According to many analyst this wedge is being formed from the July 2012 low and completed at recent high, however, this is being incorrectly interpreted.

Whilst it has moved broadly side ways for most of 2014 so far, I believe it is forming a base with 1.3450 1.340 holding it has every possibilities for it to head higher and complete the larger AB = CD measured mover to 1.44 area.

Select to follow me and the chart of being notified of any updates.

As always this is my view based on my interpretation of price action and suggest you do your own analysis for your trade planning.
DanV MOD
2 years ago
This also harmonises with DXY completing "Running Flat" sort of side way correction was wave 2 after the initial decline of July 2013 high which is clearly an impulsive wave most likely wave 1 - See Correlated Chart below.
snapshot
Reply
DanV MOD
2 years ago
On shorter time frame EURUSD chart suggest that we could have a bounce early in the week but could end the week being lower as it complete the minor wave iv and v of "c" around support zone and other Fib confluence at 1.3450 -1.340
snapshot
Reply
EmanuilValkov DanV
2 years ago
Great sync with USDOLLAR, pretty good time amity (though EUR is just 25% of the index)
You have definitely put some work in it.
Reply
DanV MOD EmanuilValkov
2 years ago
Thank you. Just point out that EUR makes up nearly 62%-68% of the DXY I believe. Largest component of DXY in fact.
Reply
EmanuilValkov DanV
2 years ago
no doubt about that. in addition, the Dow Jones FXCM index (USDOLLAR) has equally weighted AUD,GBP,EUR,JPY and in fact (currently) mirrors DXY.
option1. AUD,GBP,JPY have faded w/ volatility gravitating along questionable EUR
option2. the orbital resonance can only last so much time before deviating.

Not so much of interested which index is better as, how the rest gravitational bodies will behave in the event of intercepting? Are AUD,GBP,JPY going to move against the USD or with it?

#Thingsthatkeepmeupatnight
Reply
DanV MOD EmanuilValkov
2 years ago
From how I am interpreting price action, I believe that GBP, AUD, NZD and YEN are going to gain over USD. In fact even CHF & CAD might too. That would make USD possibly the weakest Currency for a while. That is in spite of the tapering it it is introduced strongly.
Reply
EmanuilValkov DanV
2 years ago
sounds compelling to me ,.. :D
beside the levels and labels etc... outside of the technical stuff, what is your most probable scenario in terms of cash flow?
sure many reasons will appear after the actual price move, but I thought you must be anticipating some specific line of events as certain, if such a broad USD weakness is to occur ... what is your synopsis ? broadly speaking...
Reply
DanV MOD EmanuilValkov
2 years ago
General USD weakness is based on longer term DXY analysis, view which I have held from since Sept 2012. It has taken a while to complete the longer term congestion but now feel it is progression. Also, the Stock market is close to forming a significant top. Combination of these suggest that cash leaving USD and being distributed to other currencies, and possibly JPY though making only 111% of the component, it is likely to gain a lot and have big impact on the USD. Just as it did on its weakness. Here is long term chart on what I am anticipating in USDJPY -
USDJPY - Major Trend Reversal
Reply
EmanuilValkov DanV
2 years ago
if stocks are to go south, probably would mean that people are selling large blocks. and so, they are in fact, returning their stock certificates in exchange for FED certificates (USD). But, USD doesn't pay any income. Therefore they could either put them into a carry AUD NZD (where central banks push the rates lower and so becomes counter productive to hold them because the premium is offset), or exchange their FED certificates for Treasury Certificates which do pay income. Yet, Treasury Certificates can be bought only with USD, and that is how demand for USD keeps rising. isn't probable ?
Reply
DanV MOD EmanuilValkov
2 years ago
Some of the Funds from Stocks is likely to go to US Treasuries. However we could have repatriation of funds from foreign investors, hence adding to USD weakness.
Reply
EmanuilValkov DanV
2 years ago
like who ?
even China does not repatriates its holdings into renminbi. the 3 month Libor for GBP is 0.557 (rest of the majors are not much different) and inflation is at 1.9% in UK (as of June 2014). Simple put, you pay 1.4% amortisation just by holding them. why would anyone do that ?
Reply
DanV MOD EmanuilValkov
2 years ago
Hmmm.... Sorry, loosing the thread now.
Reply
traderWgun DanV
2 years ago
There is, IMO, absolutely no evedenice that suggests this move is corrective.
Also, the relationship between wave a and b are very unusal.
Calling for new highs is pure speculation from my technical point of view.

I think we are proabaly doing a flat.

Wave (B) of a flat or first leg of a third wave?

Good luck!
Reply
EmanuilValkov traderWgun
2 years ago
it is typical .618 what is so unusual about it ?
Reply
traderWgun EmanuilValkov
2 years ago
Sorry, but I'm referring to the main chart. There is nothing wrong with the one above. But I do not understand the chart above (w followed by (x)?)
Reply
DanV MOD traderWgun
2 years ago
I understand. If as you suggest it is a possible Flat, it still suggest that this is side congestion which is likely to resolve to the upside in due course. Unless I am misinterpreting what you mean.
Reply
traderWgun DanV
2 years ago
No, I'm also bullish short term. If we get a new low which creates an obvious five waves decline formation from 1.3700 high, and then a break above the high, I would get bullish.
This scenario would make my flat count relevent again https://www.tradingview.com/v/fMJhxzhw/'

But until then, I'm looking at this decline as impulsive.
Reply
DanV MOD traderWgun
2 years ago
Yes, I understand. Downside 1.3450 zone likely could hold.
Reply
DanV MOD traderWgun
2 years ago
Thanks for your comment. You could be right about a Flat as time will tell how it will develop. However, at this moment, this being an impulsive decline with wave 3 in development do not seem to be confirm by momentum as we have possible RSI divergence with low of wave 1 or A labelled on your chart.
Reply
DanV MOD
2 years ago
Upon going over H4 time frame chart, I have relabelled the last sequence from May 2014 high and it seems that move down from July high we have not abc decline but rather potential falling wedge ie "Ending Diagonal 3-3-3-3-3. If this is the case we should form bottom near 1.3480 but 1.3450 in extreme spike move. Should this develop then It would give me greater confidence in my larger time frame expectation.
snapshot
Reply
mkdeep04
2 years ago
Dan pls check n comment on c of B count http://prntscr.com/4b48ti
Reply
DanV MOD mkdeep04
2 years ago
Hi. Yes the minor 5 wave decline of wave "c" of B went little further than originally anticipated. So your labels now would be more reflective of the price action. So assuming that is correct we should have bottom in place and experience a strong bounce at the minimum, but more likely, a new up trend could develop. Hope this helps.
Reply
kakola
2 years ago
So WXY is like a sub-ABC ?
Reply
DanV MOD kakola
2 years ago
In this case obviously the move anticipated has changed to potentially full 5 wave impulsive decline. However, WXY normally marks a zigzag where there are no clear 5 wave counts on any of the swings of the zigzag which could be labelled abc zigzag which required at least the wave c of the zigzag to have 5 wave internal structure. Hope this helps.
+1 Reply
Any particular reason why this hasn't played out? Appreciate the charts.
Reply
DanV MOD MichaelSt George-Yorke
2 years ago
Yes. The pace and magnitude of the decline was more than anticipated. This is more significant to short term traders. If any planned a long trades based on this analysis might have either not had confirmation for long or at worst had to take a loss. However, the overall concept and anticipation of bigger picture has not changed. ie the low that will be formed at lower level is going to be significant and not one where it will just have dead cat bounce and EUR then plummet to say 1.20 or lower still as many are now suggesting.

You will the above thought in my subsequent published chart and further update added today. I hope this goes some way to answer your question.

If you have alternative suggestion and explanation why it did not play out, I would be eager to hear it. Thanks for your question in the meantime.
+1 Reply
Ideas Scripts Chart
United States
United Kingdom
India
España
Italia
Brasil
Россия
Türkiye
日本
한국
Home Stock Screener Economic Calendar How It Works Chart Features House Rules Moderators For the WEB Widgets Stock Charting Library Priority Support Feature Request Blog & News FAQ Help & Wiki Twitter
Private Messages Chat Ideas Published Followers Following Priority Support Public Profile Profile Settings Billing Sign Out