Part 1 - The Euro
The last two months of action for the Euro have been surprising for the majority. Four Months ago the currency was sitting at 118 and with it the media where widely responsible for the currencies steep decline. Four Months out and we have the Euro sitting virtually at 138! 2000 points higher!
So the real question is this;
What has changed?
Absolutely NOTHING!
When the currency was at 118 the globe was questioning the currency durability with many pundits giving views of 1 to 1 with the dollar. At TMS we stated that the Euro will rally in which monthly charts such as the exact following were provided:
Of course the currency had just made its lows back when this chart was published and what's more technically you couldn't even brand the low as THE LOW as many would have needed more price action to confirm. However timing is critical for tradingmarketsignals.com and we made our bold predictions known to the global financial audience.
We mapped out an easy hit to 135 in which we felt this would be completed sometime in-between September to the start of November.
So when price has hit 138 what on earth does this mean? 150 or 120?
It is fair to say that the recent strength has overshot our expectations slightly but further out we feel the Euro will likely come under pressure again.
The currency has continued rallying and although the monthly candle of October is premature at this stage, we would fully expect the currency to end down in the month of October.
Of course we would not expect the currency to go to the moon but likewise we will not be marrying this current prediction as it would be completely irrelevant for tradingmarketsignals.com as to if the Euro finishes down or up for October. Our success is measured simply by our TMS system that has accumulated over 3000 points in the last two months.
We would however explicitly say that 135 133 and 130 should comfortably print for the month of October.
- For this to occur, the currency will need to stop its rally and end the chances of CONTINUATION.
- The Currency will need to produce a decline in which a CORRECTION would need to be seen.
- Once this is produced the likelihood of a CRASH will trigger in which this time we will not be ruling out a visit to the lows again and may we also state that 1:1 with the Dollar now seems rather plausible!!
Four Hour Chart below - Fibonacci
The chart above provides some interesting technical clarity:
The highs of 133 in early August and the lows of late August have been given a Fibonacci grid. Interestingly you can see that the Fibonacci extension of 161.80% sits at the current high of 13812.
IF this is to hold as THE HIGH then 13812 must not be taken out and the continuation of this rally must stop now. The correction would then be underway in which the red channel must be broken. A healthy correction can take the price of the Euro towards 135 and once the blue intersecting support line snaps the Euro will be prone to further selling in which falling through 133 will open up the earlier range bound action lows to 126!
So what will denote if a CRASH will be lining up?
Firstly the size of the prospective declines and secondly the volatility attached to them! We were one of the select few to print charts showing marks of 135 will be met when price was at 120! Now when price sits at 135+ we will happily mention 118. Not with the same conviction we had back then but rest assured the risk/reward tables are TURNING again and what seems obvious too many is mostly incorrect!
At all costs the Euro must avoid taking out the current high shown by the Fibonacci grid. Further out we would not like to see any move above 14052 for this current week of October.
In a bid to contain excitement we must mention that the starting point of any downside will be to halt the continuation of the Euro's current rally.
For the first time ever TMS has made a 6 month subscription package available to our global audience in which an exclusive rate has been issued for a limited time only. All our annual subscription packages were snapped up immediately and unfortunately will not be offered again until some point in 2011. Having been bombarded with requests to bring back a package rate we have decided to tailor a 6 month package for new clients whilst also giving a chance for our current monthly subscribers to join us at a rate in which the availability will soon finish - TMS will only allow for the availability of 100 places.
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