EURUSD - COULD IT BE THE "COME BACK KID"? - UPDATED by DanV on TradingView.com
29 March 2015
Updates and comments
My last 2 published charts (4 & 2 months ago) of EURUSD suggesting potential low could form have been woefully premature. Particularly as the wave 5 became an extended wave which no one could have anticipated following ECBs QE announcement.
However that 5 wave decline now appear close to completion including the 5th extended wave in that cycle. In addition other possible features suggest that at least a possible retracement could be expected if not complete reversal.
General sentiments and Greece's situation would appear to be still a focus for many as well as continuing ECB's QE making it near impossible to envisage significant change in direction. However, similarly it in near impossible to correctly identify exactly how much of these fact already reflected in the price and how much are still to play out in future price decline.
What if the pessimism is overdone, or that Greece inevitably defaults and Eurozone, leaves or USA postpone rate rise that has been major expectation on which it has gained over other currencies?
Therefore, I am making my analysis only based on technical and would fully understand if some think this is rather foolish.
Lot of the detail are on the charts but here is a Technical Summary:
1. Approaching lower parallel of the pitchfork with RSI on oversold zone on Monthly.
2. Wave (a) = (b) measured move reaching 100%.
3. On weekly, ADX is overextended where move often ends with RSI & - DMI starting to diverge and coil suggesting that this cycle could be close to completion.
4. Since the May 2014 high we appear to have 5 wave near completion with possible retest of recent low needed to complete the minor 5th wave of the extended wave 5.
5. There is overwhelming expectation of reaching parity which could disappoint and trap many bears overstaying their welcome.
6. Though if it hit parity that would not necessarily alter the larger perspective.
The above could be better appreciated with comparison of my DXY chart if you have not already seen that.
Conclusion: Possible retracement to 1.20 would not be out of place even if complete reversal fails to materialise.
Disclaimer: All of my work above could be completely wrong, so please use or disregard at your discretion.
As, always please do your own analysis for your requirement. Select to follow me and the charts for notification of any updates. If you like the analysis show this by thumbs up and constructive comments or alternative ideas for all to learn from.
Thanks for taking the time to view my analysis.
DanV