DanV
Long

EURUSD - At Least A Relief Rally Could Be In Store

FX:EURUSD   Euro Fx/U.S. Dollar
In my last EURUSD             chart I outlined reasons for possible bullish move (please refer to that chart, link below). The weakness since then has not completely removed a possibility of strong rally no matter how remote that might sound right now.

There are many fundamental and political cross current at play and could complicate any attempt to analyse this pair along with most USD Pairs. However, From Elliott Wave perspective we appear to have completed or are close to completing the 5 wave move from last high in May 2014.

If this is correct then we could expect a reversal or at least the retracement of the decline by 38.2% (a common fib ratio) could be the minimum expectation.

Technicals to note are:

1. Overwhelming bearish sentiments for EURUSD             and COT report suggesting an increasing short interest.

2. At a Nov 2005 low that could act as potential support.

3. At a potential support line of MACD which also coincide with Stretched ADX as it did with Nov 2008 low, June 2010 low, Aug 2012 low.

4. Seasonal trend suggest potential low in Late Jan - Feb time frame. Potential time symmetry (See chart below) suggesting mid to late Jan for potential low to form.

Therefore a retracement is what could be expected and bearish move to the downside now would be limited and get very risky trade.

Future longer term prospect for EURUSD             and other USD Pairs depends on if the 5 wave decline since May 2014 high become a larger wave 1 of a much longer bearish cycle or completes the bearish cycle. There are no way of knowing that right now.

Therefore once the low is formed the nature of bounce would give further clues for longer term prospects. Will be observing that with keen interest.

As always, please do you own analysis for your requirement, select to follow me and the chart for notification of future updates and indicate with Thumb-Up, if you like the analysis. Leave constructive comments so we can all learn from it.

Thank you for your taking the time to check my analysis.

DanV
DanV MOD
2 years ago
EURUSD Daily chart with possible time symmetry
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DanV MOD
2 years ago
Corresponding DXY chart
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DanV MOD
2 years ago
DXY 4 Hour time frame suggest that it could have topped already and deeper retracement is already under way.
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antimattero
2 years ago
I am a little bit pessimistic about EU situation right now, I think we will breakdown 1.1649
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jangseohee antimattero
2 years ago
I suppose 95% are pessimistic about EURO right now
DXY vs FXE
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Nica521 jangseohee
2 years ago
Remember your feelings unfortunately don't mean anything to the FX markets and it all up to the technical s :-)
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jangseohee Nica521
2 years ago
It's not my feeling by the way, the chart shows that when >90% flock to one place, the place is bound to get Overly crowded and adverse situation will results be it Euro or USD :-)
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vlad.adrian PRO jangseohee
2 years ago
What do you mean 90% bears in euro, 10% in USD? Did you take the time to inform yourself how the DXY is constructed before making this comparisson (of almost the same thing) ?
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jangseohee vlad.adrian
2 years ago
DXY is a weighted geometric mean of the dollar's value relative to other select currencies

Euro (EUR), 57.6% weight
Japanese yen (JPY) 13.6% weight
Pound sterling (GBP), 11.9% weight
Canadian dollar (CAD), 9.1% weight
Swedish krona (SEK), 4.2% weight
Swiss franc (CHF) 3.6% weight

I am only referring 90% from the chart in context.

Please enlighten if i am wrong, still learning :-)
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Ansari
2 years ago
Hi DanV ,your analysis very useful and informative for me, many thank's.
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Ansari
2 years ago

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SS96 PRO
2 years ago
p-a-r-i-t-y
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DanV MOD SS96
2 years ago
Thanks.
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Nice chart. I'm of the same view. Contrarian. If you notice, EURUSD's past price action has always well respected the technicals, Be it trend line break or RSI divergences. Considering just about every other institution is calling for EURUSD parity, just a bit of good news will certainly see a rebound, which should result in the short squeeze helping the rally further. 1.20 is my first target followed by 1.228 and eventually 1.3, of course all targets above 1.20 trading risk free.
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jangseohee justatrader
2 years ago
Trading psychology! Never listen to institution or analyst, i won't have anyone to blame :-)
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justatrader PRO jangseohee
2 years ago
True that. But the point is this. When almost everyone is putting their money to just one side, something's gotta give :) and I hope the EURUSD longs would win in this battle. (The current scenario reminds me of elliott wave 3, when market sentiment is extreme.
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jangseohee justatrader
2 years ago
emotion still comes in, " i don't want to miss out in this chase", it euphoric :-)
Institutions and analysts call for parity because they need the last fool (according to Alexander Elder) to be the last bull, in order for them to offload :-)
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vlad.adrian PRO jangseohee
2 years ago
There is a difference in offloading an over extended stock to the last fool, and the policies of the biggest central banks in the financial system. Just so you know, Dr Elder, who's worked pushed me into a profitable trader (his work had the most influence on me, and continues to influence me every day) was calling for Euro longs 2 months ago, and he is probably still looking on the long side of this trade. No matter what happens next, the place to be is long dollar, short euro, no question about it. No matter what bullish signal this chart gives, I wouldn't take it. People who are fighting the bears on this pair are actually fighting Draghi, and to some extent the FED (the FED has not been so radical since Yellen is in charge in its statements). I believe that these two institutions are larger than all of us, and if they both give out the same message, who are you to fight it? I don't mean you in particular, I am reffering to all the Eurusd bulls. I think we should all learn some modesty when trading. There is a time to be a contrarian, and there is a time to be a herd follower. I believe right now it is the time to follow the herd.
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jangseohee vlad.adrian
2 years ago
Well said, long only for the very short term :-)
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Recluse82 jangseohee
2 years ago

Now, the interesting thing about the EURUSD's trend since May is that it unfolded in five waves into the recent low. The fifth wave has kept extending, going past our idealized price targets. But one day (soon) it will end, and EURUSD will zoom upward.

You can only wonder what fundamental reason analysts will ascribe to the coming rally.

ewi international.com
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jangseohee Recluse82
2 years ago
it doesn't matter as long as we make money out of it :-)
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nappenbir
2 years ago
Hi!

I am Long on 1,1790!

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DanV MOD nappenbir
2 years ago
Yep. Could be good move if we have follow through. Thanks
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Cityfox DanV
2 years ago
12345abc
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DanV MOD Cityfox
2 years ago
Hi. I am not sure what you mean. I we have 1-5 waves move then at least abc move up for retracement is normal. Unless where 1-5 completed the cycle and we have new cycle in which case we would have 1-5 wave move in the opposite direction as reversal. Hope this helps.
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Cityfox DanV
2 years ago
Sorry Dan, I've been on babypips I can see 1-5 waves, so next should be abc?
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DanV MOD Cityfox
2 years ago
Yes at least. Unless we have reversal in which case as commented above. Thanks for your question.
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Recluse82 DanV
2 years ago
yes but the question is how far still drop
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DanV MOD Recluse82
2 years ago
has not chance of ever bouncing. That could well be true.

However, as you can see based on my wave counts and projection of internal Fib relationship suggest that now we could look for possible low around 1.14-1.135. If that does not hold then next possible low could be in thee region of 1.2. This is clearly shown by minor wave counts. There is nothing to suggest right now that these waves could extend even further but will review if price action requires it.

When market is in free fall the moves can become very exaggerated. But one can only go by what normally holds with allowances that extreme moves might go further than anticipated.

However, you must do your own analysis and disregard this if you believe that EURUSD is in complete free fall and has not chance of even making any retracement as many have already concluded that EURUSD could now fall to parity at best or even lower to 0.8 . Should this materialise then I will hold up my hand and admit I got it all wrong. Till then I will maintain the stand noted above and in main published chart.

Risk of overstaying with mature trend and be caught on the wrong side on reversal increase with lower prices in this case.
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jangseohee DanV
2 years ago
I challenge this "falling Axe" at 1.16400 with the notion that what is lower can get lower.. but my instinct just kick in. No leverage just 1 lot to see how much pain i can BEAR.. (having -ve return :-))
So Draghi could be digging the grave for me on 22nd.
The retracement target of 1.18 could sound crazy.. wish me luck

EURUSD, despair sets in for bull or bears are exhausted?
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DanV MOD jangseohee
2 years ago
You could well be right on this one. Though must keep eye on what is normal money management. Thanks.
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DanV MOD
2 years ago
Updated Weekly & Daily DXY chart suggesting possible significant top or intermediate top being formed and is either complete or very close to completion. Either way this suggest at least some drop in DXY which would allow EUEURD either to make a retracement or a reversal. Weeky chart
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And Daily
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jangseohee DanV
2 years ago
my analysis 3months back didnt take into acc a rocket move vertically, hence it still pretty well stuck under the multi-year downtrend red line which is now around 94

Fed playing with Symmetry, Amen
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DanV MOD jangseohee
2 years ago
Agreed. Thanks for sharing.
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jangseohee DanV
2 years ago
just my humble opinion, no mention
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DanV MOD jangseohee
2 years ago
Heheheh, Understood. :)
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DanV MOD
2 years ago
It seems EUR is appearing to be the showing relative strenght. Could at least last till Thursday or beyond. Will monitor how it develops.
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