• Home ::
• Technical ::
• Analysis Reports ::
• Currency Technical Report

• Send
• Print
• Add To
• Rss

b2ba4150-645f-49ef-a076-448fed584f20

10

5

Currency Technical Report

Tue, Nov 18 2008, 10:24 GMT
by George Antonakos

FXGreece

EUR/USD

Resistance: 1,2640-45/ 1,2690-00/ 1,2760-70/ 1,2850/ 1,2930
Support : 1,2580/ 1,2500-10/ 1,2450/ 1,2380/ 1,2330-40/ 1,2250/ 1,2200/ 1,2140-50

Comment: There is nothing new to add to our previous analysis regarding euro’s outlook in the short term, as the sideways consolidation continues. Tuesday is usually a day of high volatility and we should be cautious as consolidations usually give the false feeling of security to play the ranges. Important resistance is found at 1,2740-60 and 1,2840-60, while support emerges at 1,2510-20 and 1,2410-20.
Market is still neutral and that gives us the opportunity to focus on the longer term, examining the monthly chart and the cycles once again.
As we mentioned in our previous analysis, we can recognize a basic 4 year cycle for euro, and a main cycle of 16 years that separates the lows of 1985 and 2001.
We can see similarities in the uptrend from 1985 lows to 1991 or 1992 tops, with the 2001 2008 uptrend
(when the 16 year cycles were at their upward translation). We think that the current decline would also have similarities with the 1992 – 2000 decline.
Having in mind that history does not repeat itself in the exact same form, we have projected two possible scenarios. In the first one, we extend the move from 1991 tops. According to this scenario (which was presented in our video analysis), the sharp drop will probably be followed by an intense rise towards 1.6040 tops or higher and a quick retracement to 1.2000 or lower, Approximate time for the lows is the beginning of 2010, when 4 and 8 year cycles reach their lows. In order for this scenario to be valid, euro should have remained above 1.2900-3200 area. Even if the possibilities for this scenario are limited we believe that they still exist…
According to the second scenario, the decline is similar to the one from 1992 tops. The drop should continue with small reactions and remain to low levels during 2009. Euro should rise to 1.5000 area in a big corrective move, that is likely to follow (similar to the 1993-1995 upmove.. )
As for the long term view, it is clearly in both scenarios, that the trend for the euro will be bearish and euro is likely to reach parity with the dollar. The 4,8 and 16 year cycles reach their lows at 2018 …



STRATEGY
Buy: We are moving in the Bollinger Band ranges in the hourly chart, so current levels offer buy opportunities, adding more at 1,2550 with target at 1,2700 or 1,2740-60. A clear break could be followed with buy positions….

Sell : Sell opportunities emerge at the upper part of the Bollinger. Stops should be set above 1,2770…


As always, we keep our positions small due to high volatility…

Published on  Tue, Nov 18 2008, 10:33 GMT