If you insist on being a euro bear – read on

Trying to catch turning points on the bouncing euro has thus far been a painful exercise in humility and frustration. For those who got long quickly it’s been a time of being one of the few trading an upswing in what has been a long and sustained downtrend. The following chart highlights how depending on your trading predilections you can find both a bull and a bear argument. For mine I suspect the bearish argument may hold a bit more water but soon enough we will see whether the Euro is set to speed higher or join the macro trend lower.

As you can see here, the EURGBP rate is showing some early signs of a reversal at a Gartley cluster level (marked ‘C’). I would suggest that in this case any short trade would be accompanied by a stop above the newly formed peak in the price.

On a more bullish argument of the same chart, you can see that the 50 and 200 period moving averages and their surrounding volatility bands are now starting to point northward which shows that this reversal in momentum has been gaining significant traction – though whether it will overwhelm the broad daily and weekly trend remains to be seen. The +2.25 SD level of the 200 period MA that price is trading above may form a good base for a continuation bounce. This will depend on the momentum that any embryonic uptrend is able to make. In any case it may well be a good point to watch for support.

On the hourly chart above you can see some further short-term signs of weakened momentum in the rate which a very clear peak being formed. The MACD also shows a clear crossover so there is some signs that we will be in at least for some cooler momentum in the near term at least

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2 Responses to If you insist on being a euro bear – read on

  1. dv34 says:

    Great post! – I absolutely agree waiting for today’s close…
    I am watching eurusd and eurgbp if they close >70% bearish body I will try to short intraday.

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