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EURUSD Retrace rally then big drop


Mercury

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21 hours ago, dmedin said:

Well, apparently the consensus is for another year of dollar strength

Great piece on RealVision today with an economist called David Rosenberg, who has recently started up his own firm (aged 59).  One thing he states, which is a belief I hold, is that economists who wok for large firms cannot go out on a limb as this is a career threat so they hug the consensus.  In other words the consensus is self-fulfilling and therefore will also hug the trend and never spot the major turns.  For that you need something else...

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EURUSD is breaking lower.  We could see a bit of a bearish move to punch through near term support.  If price gets past circa 11,050 then I would expect a test of 11,000.  I think 10,950 is the key test.  If price finds support here the bullish scenario could be on but a firm break and we can expect a test of the lower channel line around the 10,800 mark probably.

I see similar set ups on GBPUSD where there is a gap to be closed just below current price action in the short term.

EURUSD-4-hours_200120.thumb.png.7f66d64b046268e20788a8638ff1d30b.pngGBPUSD-1-hour_200120.thumb.png.61e1765fb1f0e12a30c686fd9079c258.png

 

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2 hours ago, Mercury said:

EURUSD is breaking lower.  We could see a bit of a bearish move to punch through near term support.  If price gets past circa 11,050 then I would expect a test of 11,000.  I think 10,950 is the key test.  If price finds support here the bullish scenario could be on but a firm break and we can expect a test of the lower channel line around the 10,800 mark probably.

I see similar set ups on GBPUSD where there is a gap to be closed just below current price action in the short term.

EURUSD-4-hours_200120.thumb.png.7f66d64b046268e20788a8638ff1d30b.pngGBPUSD-1-hour_200120.thumb.png.61e1765fb1f0e12a30c686fd9079c258.png

 

Mahmoud is seeing the bear as well for EURUSD: 

Looking at the daily chart, we notice on Friday EUR/USD tumbled to a lower trading zone 1.1059 – 1.1108 then closed below the 50-Day average providing two bearish signals.


A close below the low end of the zone could lead more buyers to exit their trades. This paves the way for sellers to take charge and press EURUSD towards 1.0951. Yet, the weekly support levels and area marked on the chart (zoomed in) should be watched closely, as some traders could exit/join the market nearby these points.

On the other hand, any failure in closing below the low end of the zone may reverse the pair’s course. This could rally EURUSD towards the high end of the zone. Further close above 1.1118 might encourage buyers to repeat last week’s scenario and push towards 1.1175. That said, the weekly resistance level underscored on the chart would be worth monitoring.

image.png

EUR/USD Bearish Signals on the Radar – Euro vs USD Price Forecast

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2 hours ago, dmedin said:

think you're draining the dregs from the bottom of the barrel if you short now, right?

I quite agree.  Even taking a Short on the turn wasn't that compelling, offering only a few 100 points for a high error risk.  For me this is about tracking for a trend change turn.  Given the length of time and low volatility this trend has exhibited I would not be surprised to see it eek out further whipsaw and lateral movement before the turn occurs and if this coincides with a bear phase for GBPUSD, which is my current bias, then EURGBP may yet be the way to go shorter term for FX traders.  However overall I prefer the look of USDCAD for a long term bear market if and when Oil really gets going.

EURUSD-Weekly_180220.thumb.png.9219da499c5504c73b6f930896cf9f97.png

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49 minutes ago, dmedin said:

If we get a bounce off here the next stop is down there

Doubt we will see a complete capitulation at this stage, possible of course but there is a lot of support to bust through.  My lead scenario is for a 3-4 retrace about now followed by a final wave 5 to a major turning point, this is in line with my USD DX analysis too.

EURUSD-Daily_200220.thumb.png.2da82b171302c2fbf6870c4b71557069.png

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  • 2 weeks later...

EURUSD seems to have broken a key LT trend line and now perhaps put in a retest fail.  If this is confirmed with a new higher high then a strong rally phase is indicated (i.e. that USD bear I have been tracking is on!).  May still get a second retest of the trend line or break out zone but otherwise looking good.  I am not trading this pair as I have no faith in the Euro long term but other pairs look interesting, especially perhaps GBPUSD as USDJPY is dependent on a resumption of the Stocks bear.

EURUSD-Daily_050320.thumb.png.bd05b2d395cd5b701a8e59b0d1ed1be5.png

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