Overnight, the EUR:USD pair rallied to a significant Fibonacci 38.2% level on a daily chart. This target was established using the 12 JAN 2010 HIGH = 1.4579 and 04 FEB 2010 LOW = 1.3629.
While the Eurozone is devising various ways to patch its financial crisis, the situation remains critical on at least two relevant questions. First, how temporary are these financial measures? Second, What about the economic burdens of Portugal, Spain, Italy? I believe that the current rally is to remain shallow (along these Fibonacci levels) on the basis that investors are likely to raise these questions but face uncertain answers regarding the overall European outlook.
On a different front, we are also discovering that the US economy has been exposed to some degree to the Greek financial crisis. While this fact was not revealed during the early development of this off-shore crisis, the media are now bringing this home in terms that should affect the USD within the EUR:USD pair.
OVERALL, I expect a shallow Fibonacci-paced retracement in the short-term, while the mid-term outlook still favors deeper downside on the basis discussed above.
Happy trading!
- Dalcindo
$XEU:$USD (RS) - 12-Mo., Daily:
$XEU:$USD (RS) - 3-Yr., Weekly Chart:
- Dalcindo
------------------------------------------------------------------ Message in reply to:
Re: $USD Pullback Per Fibonacci; Relative strength charts: $XEU vs. $USD:
Hi, 3x!
Still trading off of oanda.com platform here.
High = 1.37114 Low = 1.36438
Positions at 100,000 units each for Fibonacci retracement levels:
- 21.4% = 1.36596 target - Reached, still in position with 300,000 units; moved stop loss to 7%
- 38.2% = 1.36695 target - Reached right now; position unchanged; moved stop loss to 15%
- 50.0% = 1.36776 target - Pending; expecting selling 1/3 of position
- 61.8% = 1.36854 - Pending; expecting to sell 1/3 position
- 100% - High = 1.37114; speculative interest in keeping this position based on favorable longer timeframes (i.e.: 15-minute and 60-minute charts still favor a higher retracement; secondary indicators are getting taut and demand some unwinding.
Long-term outlook remains favorable for the USD in this major pair.
Current support = 1.26607 = 55-EMA on 5-minute chart (actually just got validated as of this typing).
Re: USD - At High, Yes ... But Should Get To Higher, Last High:
Hi, 3x!!!
There are indeed many strong technical events that are calling loud and clear for a relaxation in the recent USD advance, and this is getting even clearer every day I trade the major EUR:USD pair.
When you posted "USD time to retreat", I took it as a comment and looked into it based on daily, weekly and monthly charts. I also looked at other mitigating charts such as the EUR and USD indices and their relative strength expression: EUR:USD, as well as the UUP, UDN and their relative strength expression: UUP:UDN.
I have the say that at this point, there are no clear line up of leading or lagging indicators favoring a continuation of the recent bullish ride, or a resounding alarm for imminent reversals.
Instead, I continue to find two competing trends (one in a shorter timeframe than the other) suggesting serious resistance ahead.
For instance, Trend (1) in the DAILY chart below - which had received a long historical validation warranting its significance over time - suggests that the price for daily $USD continues to have more room before it reaches the upper border of that bearish channel. However, Trend (2) suggests that the rally has maxed out, and a decline is overdue.
Incidently, two similar trendlines of equal significance (borne out of "Convergence-Hi" points in the WEEKLY chart below) are also defining a similar conundrum regarding the due timing of a decline. in fact, the current weekly close is calling for a decline also based on a "multi-line convergence" of significant resistance lines, which combined are dead on for calling a decline.
A third and last case of confounding signals also come from the MONTHLY chart below, which indicates that price has not reached the significant mid-point of the bullish channel which was defined as far back as September 2008.
So, what's the deal? I believe that the confounding signals are leaving a significant window of probabilities expressed in the daily trends (1) and (2), but that technicals favor a higher attainable close before the price folds back to support levels.
TECHNICALS FAVOR HIGHER CLOSE: I do not bet any position that the price will for sure close higher, so I continue to scalp the dollar short and would not dream of leaving any overnight speculative positionts ... Much less over the week-end.
However, technical events that favor a higher attainable close before a significant down-turn in the greenbacks are:
DAILY Chart: 1 - RSI's uptrend remains unviolated, while its 14-RSI line has re-penetrated over the 9-RSI's 14-EMA line. This may be obscure an event, but the timeframes required for this "surge-within-a-surge" suggests an undying bullish sentiment against all odds. This in fact reminds me of the financials that kept going and going against a fundamental background of bad reports, more bank closures, and uncertain consumer market. Therefore, for this bullish-within-bullish event to occur, there's got to be some savvy info driving the spearhead to higher indicator levels. 2 - Secondry indicators in the CCI, Slow STO, Wm% and PPO show that at the current highs, signal lines are reflecting yet another bullish upturn, as they are kicking upwards even at the close of the week itself. Some residual bullish expectation is shaping this chart, IMHO. Finally, the ADX is kinking back up at mid-level, suggesting that the recent fade in up-trend is expected to be renewed, especially as (+)DI remains well within reasonable bullish range.
WEEKLY Chart: 1 - Here, RSI is remarkable bearish, having been stomped at the critically defining 60-level for any bearish reversal to occur. However, the line-up of secondary indicators that I usually follow failed to provide any strong signal of "Pre-Decline Pattern" formation, adding more doubt overall to any certain decline. 2 - Secondary indicators, as just discussed remain well within bullish territories. Even the Slow STO has not yet neared the signal line to provide any imminent threat of a decline, IMHO.
MONTHLY Chart: 1 - Finally, this monthly RSI lacks the synchrony needed to line up with its daily and weekly counter-parts, although it recently defined a more tapered curved suggesting that, although a high is imminent, there may be some more terrain to cover. respective shapes. Not that the shape of the indicators should shape the path of price, but I do not see any clear fatigued curves within this less sensitive chart (i.e.: the daily chart should still remain a more sensitive tool of reversal measurement, which in itself remains ambiguous in that regard, still).
So, overall, I have to go by the charts and expect that, although some significant resistance will apply against USD this coming week, a last gasping surge may provide the technical validation of these channel upper borders in the daily chart before a certain decline materializes.
I realize that I type way too much - Although I do this to document my TA in details. However, for interest of time, I will spare you further comaprative analysis on UUP, UDN and relative strength expression thereof. Thank you for reading thus far. Sincerely. Dalcindo.
$USD - 12-Mo., Daily:
$USD - 36-Mo., Weekly Chart:
$USD - 10-Year, monthly Chart:
- Dalcindo
--------------------------------------------------------------- Message in reply to: USD time to retreat ---------------------------------------------------------------
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