EURUSD

I can sense a little confusion in the air out in blog land but not here. I absolutely know that this pair can go up and down or even sidewards - it seems to me that analysts utilizing EW alone forget this! So, a quick overview. The 80day and 160day trends are still down but the momentum study at 16hours is very oversold. The straightness of this study had me calling for an expanded flat 'b' wave ending on Friday, but more important is that the 20day cyclic phasing in the weekend report said a low at that degree was due in. Obviously, a 20day low is unlikely to turn the 160 day trend alone, so we need to know where that sits compared to its half cycle brother, the FLD.

The gold line that has been hugged since Friday is the 160day FLD. I said on Monday that the cluster of lesser order FLDs would be the initial target for consolidation into the1.3550-1.3560 area, supported by the 5/10day trend band cross that we saw. This has played out and so has the move to the 20day FLD, which was expected because of the 20day trend low as discussed above. So, how does this help predict anything then? All of the lesser order FLDs of the 160day version are based on 50% of itself; so 160day, 80day, 40day, 20day etc. I no longer adjust for the weekends and just assume these trends relate to the trading days, keeping an eye on the underlying 8x10day lows that makes for an 80day cycle, whether it comes short or long in duration. The basic thesis is that given that 50% of anything is a median retracement/regression ratio, and the corollary expansion is the doubling of that value, there is a natural organic 'ladder' of two steps forward, one step back going on in both directions. Another key is the acceptance of the fact that the lesser cycles are in fact derived from or add up to the larger cycle, so that internal 'permissions' are required to ensure any trending move can be sustained. So, with the 80day and 160day trends still in sell mode, price sitting at the 160day FLD needs 'permission' from all of the 5/10/20/40 & 80 day cycles in order to move forward. I do not know exactly how this will pan out, but knowing that there is an in built tendency for all travelers to want to travel together in a strong trend, leaving waifs and strays behind is not the way to do it. For now, the 5/10 trend band is bullish and there are plenty of northern targets to aim for. Readers might want to look at the action on that hourly momentum study - does that look like it is getting tired or getting ready to spring up and out? Until that trend band unravels to the downside, I'll assume the big trend wants a rest or is unsure of itself. If only some more of the 'wavers' were too!