This the second of two articles for the EURUSD Weekend Summary. The first was posted yesterday and was based on range bar studies. This post uses the more familiar time and price charts. The conclusions for the week ahead are the same, but the different lenses are worth the effort, I feel. If you have not read the first article, it can be found in the link index to the right of this page.
The Momentum study is overbought in the monthly chart with the MACD at the zero line. Price is under the 50 monthly period FLD within a corrective formation. So a bearish theme persists on the long term chart. However, price has been in an uptrend from the 1.2041 low, which was the last of numerous visits to the 360degree pyrapoint line calc'd off the all time low. The blue grid line directly under price has held throughout this move up and the 450 degree pyrapoint line at 1.3391 could be key in the zone getting back tested at present. Until that blue line folds though, I am assuming that the green grid line above is the target, which is a reflection of the bearish speed line study from the 1995 high to 1997 low.
The weekly study shows momentum relieving its overbought conditions, although interestingly, whilst prices rose this week. I think the 90 degree line at 1.3162 looks the target with the median of the whole regression channel from the corrective top, being at the same place as this and the bottom of the channel from the 1.2041 low, as well as the 50 weekly period FLD. Whether price actually gets there though, is another matter.
The first daily chart shows price holding under the 200 day rolling regression median and the channel median from 1.2041, but pretty much exactly at last year's high. This seems to be the market's line in the sand right here. I am showing an expanding diagonal 'D' wave floor at the 45 degree angle of the Gann grid of last year's high-lo and the daily 50period FLD, but that assumes the momentum study on a daily-weekly basis does not go on to nest. Given the ongoing overbought conditions on the weekly and monthly chart, that may be a big assumption to make and either new lows, or more time baselining that 'D' floor, is likely on the cards, rather than moving straight up. The MACD is showing a lower low compared to price action, which may actually be positive but even at this degree, matters appear ambiguous - no surprise there!
The second daily chart shows the 1,2 & 3 month FLDs as a band. Until that red dashed line is taken out, the whole formation does look like an 'A' down and now we are in wave 'B' up - so not a wave 2 or wave 4 and my expanding diagonal count is going to have a lower 'D' floor. This may address the ongoing issue with the price action of late. I think it safer to assume that the momentum in daily study will nest to clear out the overbought conditions in the weekly chart, especially whilst price action dribbles uphill. As discussed in the Range Bar study yesterday, I think a 'b' down would help to set up a 'c' in B and would add to the overall confusion.
The 240min chart shows price back in that regression channel from 1.27541 but with negative divergence going into Friday's high in both the MACD & momentum study. Given I want to see price up at that green 20 day (1 month) FLD in due course, a drop down now in 'b' to set up that thrust seems the way to go about it, if only to test that nested low at this degree. An early breach of that thick purple 40 day FLD, just above price however, might turn this thesis on its head.
Although my range bar studies saved me from an early bear count, I have found this week a little difficult to read on an EW basis. This looks about right to me, and I think 'c' up is probably in or very close to being. We are not quite at the time equivalent of the drop, but if we are going to see a sharp 'b' down then that would fit, with 'c' up making up the difference. Generally, I am expecting increased volatility next week to counter last week's trot. Down, up, bigger down and then even bigger up....we shall see in time.
No comments:
Post a Comment