History repeats itself. From a technical perspective, the current big picture EURUSD price structure looks very similar to the last two super trends that this pair has experienced. First component to the previous super trends has been a clearly defined weekly impulsive trend that lasts for between 3,400 and 4,600 pips. The current super trend's impulsive trend ended this spring with a 3,600 pip move. The second component to the super trend is a multi month long period of price consolidation that forms a flag pattern. The two previous super trends had flag periods lasting 14 months and 9 months. The current flag period is currently around 6 months old. The third component of the last two super trends is the continuation move. This is the trend that establishes itself after breaking out of the flag period and breaking through the high/low of the previous impulsive move. In the previous two super trends, the impulsive move targeted the 1.618 FIB extension of the impulsive move nearly exactly before reversing.
Applying that targeting metric to the current impulsive move, the target for this super trend is .8250. Given the fundamental picture of the two economies, this seems very plausible to me. The ECB and the Federal Reserve are on two very different paths in regards to monetary policy and the two economies will be moving at very different speeds in the future. The Euro Zone has unresolved existential threats that can rear their heads up at any time, and unforeseen threats are more likely to occur in the future that will hamper the Euro Zones economy than that of the US economy.
It is hard to tell just how long the current flag period will last, but it is important to note that positioning, which had been extremely short eurusd across all metrics, has now even out. The positioning re-balance has occurred without a major retrace (beyond the .618 level). Every rally has been heavily sold, and I believe that pent up willingness to sell at lower prices is developing. From a seasonal perspective, I would guess that the flag period lasts until January before we begin seeing the continuation move begin.
This is a very big picture outlook. As with any multi year view, there is a vast amount of room for events to transpire that dramatically alter the outlook, but as things stands at this moment, I see the chart playing out.
Komentarze
DiegoKatzman
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Great LT view, Banker! Thanks mate
FXGhost
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Great chart, thanks a lot!
JayPositano
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Interesting read, escpecially the remark about the 'unresolved existential threats' comapared to US inspires. Unfortunately.
JazzForex
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Not saying I agree or disagree but I am happy to see a TA combined with a FA and full explanation from you. Nice! Hope we will see more of this, sure beats the standard "." :)
ch4otik
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Quite interesting. Very good analysis.
With being profitable in shorter term trends, I had actually forgotten about super-trends. Thanks for the reminder. Will keep it in mind as the months roll by.
intentart
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Hi, I`m new in trading, but I follow your ideeas, I like everything you do here, and I want to thank you!