Euro FX: Is a reversal on the horizon?
Euro FX and momentum
Momentum – A bounce coming?
The Euro FX is in "Stage 4" on our Trend/Market Structure Roadmap: both the short-term and long-term trends turned bearish as of November 21.
But here’s the twist—our MACD-v indicator shows the Euro in the "Rebounding Range" after nearing oversold "Risk Range" levels.
This signals the potential for a bounce, even if the broader trend remains down.
Euro FX and volatility valuation index
Volatility – Finding exhaustion
Our "Volatility Valuation Index" seeks to locate exhaustion points from a volatility angle point.
High readings mark trend endings - or at the very least - pauses.
These high readings can coincide with BOTH bottoms AND tops,
as VVI in specific (and volatility in general) are trend agnostic.
That said, most (but not all) high volatility episodes for equities coincide with bottoms,
and high volatility spikes for commodities coincide with tops...
The VVI marked a bottom (at least for now) in late November 2024.
Euro FX and seasonal index
Seasonality – Tailwinds ahead
Seasonal trends offer a supportive backdrop for Euro FX as we close out the year.
Historically, this period aligns with positive momentum, providing another reason to watch for signs of a turnaround in December.
Wrapping up
While the Euro FX trend remains bearish, momentum, volatility, seasonality, and CoT data hint at a potential shift. Tomorrow, we’ll break down potential entry points—don’t miss it!
Author
Alex Spiroglou, CFTe, DipTA (ATAA)
Independent Analyst
Alex Spiroglou is a quasi-systematic, cross-asset proprietary futures trader. His involvement with capital markets began in 1998, having worked for various proprietary trading and investment management firms in the UK and Greece.
