EUR / USD - IS THE UPWARD FLIGHT COMING TO AN END?
Updated
My analysis today deals with how the further course of our popular currency pair "EUR / USD" could look.
> The technical analysis and selected indicators, confirm the thesis of an imminent correction.
= Why this is so, that I explain after the introduction.
The DXY / USD has a non-negligible impact on EUR /USD, as the whole economy depends on its behavior.
> Meanwhile, this seems to take run-up, for a final upswing, which could bring the precious metal under massive selling pressure.
> Regardless of these selling pressures coming from the USD, SILVER has been somewhat caught at a very strong resistance, which foreshadows a falling price.
In the following, the analysis goes into detail, so that the significant levels and areas are known to you.
For this purpose, I have performed a "MULTI-TIME-FRAME" analysis, which refers to the higher time units (month & week) and thus makes the big picture visible.
Normally all time units below "1h" are called noise, but even a - 1h-4h - analysis is of no use to you, if the knowledge about the big and whole is missing.
> We traders know that no one can predict the future and that is exactly why you have to be prepared for all initial situations.
> If the DXY should rise again, that means "BLOOD" for the traditional and crypto markets.
> This creates dangers, but also opportunities - it is important to look at the big picture.
> Which levels are RELEVANT, I have explained in detail in the following pages.
Table of contents
1st part = INTRODUCTION
2nd part = TECHNICAL ANALYSIS
= Monthly - Time frame
= Weekly - Time frame
3rd part = CONCLUSION
PART ONE
"INTRODUCTION"
After "EUR/USD" formed a top at - 1.235 - in January|2011, a strong sell-off has been unleashed after a retest of the level.
> This sell-off completed in September|2021 and formed our current bottom.
> That the pair was in a "Symmetrical Triangle", many seem to forget at the moment, which is why I hereby again explicitly refer to it (marked in purple in the picture.).
> The breakout of the triangle was the reason for the strong sell-off and is just challenged by the price again.
> In recent weeks, we have seen a very strong upward movement, which I believe could be on the verge of a correction.
= We are at the lower resistance line of the previously mentioned "symmetrical triangle" which played a major role from 2017 to 2022 |.
= Significant FIBONACCI levels and SUPPLY zones, are located in the zone and thus represent a magnet for institutional investors.
= This means translated that the price can bounce off the "Symmetrical Triangle". However, it cannot be ruled out that the institutional investors, will take the liquidity located at the "magnet levels."
= To get some clarity, we must wait for the reaction of the DXY, which will decide the following course of the EUR and the economy.
= The "DAILY" - MACD + RSI - both show divergences, which further strengthens the correction thesis.
> This divergence is seen in many other pairs trading against the USD, which further supports the thesis of a sell-off.
> Once you look at the DXY (USD index) on the higher timeframes, the further sell-off in the traditional markets becomes even more likely.
(My DXY analysis is linked below this post, for confirmation purposes).
SECOND PART
TECHNICAL ANALYSIS
For the analysis of the higher time levels, I proceed according to the onion-skin principle.
> MONTH - level > WEEK - level > DAY - level
These are divided into
> SUMMARY > CHARTS
The charts are presented in logarithmic scaling, as the given information can be visually presented in a more harmonious way.
(This also refers to Fibonacci levels.)
1st MONTH – Time frame
SUMMARY
The trend channel shown in the chart, in turquoise, was formed since 1978 and since then it was able to maintain itself as a legitimate trend channel. Its mid-trend line showed reactions when confronted and was respected by the market.
> The price is outside and had given up in 2018 after unsuccessful attempts to recapture the channel, initiating the MAKRO sell-off.
The earth colored trend lines drawn, formed in 2003 + 2008 and served as support or resistance since then.
> Price is running into the resistance line (2008) and may be facing the next major task with it.
The in the chart, drawn in purple - "Symmetrical Triangle", formed since 2017 and directed the price since then.
> The price broke through the triangle in April | 2022 and is currently demanding recovery.
The red colored trend line formed in 1992 and represents an inconspicuous but relevant level.
> If you look at the past of this trendline, you can see quite quickly what strong influence it played.
When we go into more detail about the "SUPPLY & DEMAND" zones, you can look at the "DEMAND" + "SUPPLY" zones I highlighted on the chart.
> D|1 - Zone | STRONG = followed a strong move + bounced off lower support line.
> D|2 - Zone | VERY STRONG = followed extremely - Strong move + origin 2001.
> D|3 - Zone | VERY STRONG = followed extreme - Strong move + origin 2001 + quarterly zone
> S|1 - Zone | WEAK = occurred during sell-off, not the trigger.
> S|2 - Zone | STRONG = followed a strong move + prominent FIB level + symmetrical triangle + quarterly zone
> S|3 - Zone | STRONG = followed a strong move + prominent FIB level + symmetrical triangle + quarterly zone
> S|4 - Zone | VERY STRONG = followed extremely - strong + macro FIB level
Fibonacci retracements should serve us as additional confirmation, and have been considered in past movements (last decades).
> FIB 1 | will serve as the strongest resistance should the price attempt another run up. > FIB level
> FIB 2 | are the possible resistance targets, which would be feasible in case of a successful breakout of the "Symmetrical Triangle".
> In combination with the 0.328 FIB from the MACRO FIB Level a very strong resistance.
> FIB 3 | are the next correction targets, which become relevant in case of a direct sell-off (immediately after this analysis).
> FIB 4 | is a strong MACRO support level (0.88), for a further sell-off.
Past highs and lows usually serve as resistance/support, one of which we have.
> HIGHER HIGH [2020 - Bullish Market Structure = Confirmation = Resistance
> LOWER HIGH | 2017 - Bullish Market Structure = Beginning = Resistance
Some levels of interest are in front of us, which in the last months + years, played a strong role for the market.
> The currently most relevant - POI (1.145 USD) - represents an important mark already since the year 1980 and thus takes a currently very strong resistance role.
> The other POIs are by no means negligible and will play a role in the price development in the coming days, weeks and months. (Therefore, take your time and transfer the ones that are relevant for you into your chart).
CHARTS
Overall picture
Overall picture without POIs + MSBs
ATTENTION
In the following time levels, I will only deal with the NEW, added elements..
2nd WEEK – Time frame
SUMMARY
The monthly "SUPPLY & DEMAND" zones are joined by others from the weekly view that coincide with other resistance / support elements.
> D|1 - Zone | WEAK = is a Rally-Base-Rally Zone, but additional resistance support by MSB (2020) + Trend line (Red)
> D|2 - Zone | STRONG = followed a strong move + prominent FIB levels
> S|1 - Zone | STRONG = followed a strong move + prominent FIB level + MACRO FIB + trend line resistance (earth colors)
> S|2 - Zone | VERY STRONG = followed extremely - strong + macro FIB level + "symmetrical triangle" resistance line
*** In addition, no further addition is needed, as the levels from the monthly level also cover the weekly perspective.
THIRD PART
CONCLUSION
"And all without need - the euro is the EU's death."
If necessary, this saying refers to the fact that the EURO was never intended to be a permanent currency, but only a transitional one.
What this could mean on the future course of the exchange rate, everyone should think about.
In summary, it can be said that based on the technical analysis, there are strong reasons for a long-term - falling EURO rate.
> Since the price top in Jan|2021 - the quarterly candles were dominated by bearish and the current movement looks more like a rebound.
> A possible breakout of resistance elements is possible, but should meet strongest resistance at 1.131 - at the latest. (I have marked this "death zone" with a "purple" area in the cover image).
> The divergences in the daily RSI + MACD, suggest a bearish sell-off.
For this reason, I assume a weak EURO exchange rate and a strong USD and an accompanying bloodbath in the traditional and crypto markets.
> Positioning after confirmation of this thesis = SHORT.
If this idea and explanation has added value to you, I would be very happy to receive an evaluation of the idea.
Thank you and happy trading!
ZIEL IST DIE AUTARKIE | THE GOAL IS SELF-SUFFICIENCY
> The technical analysis and selected indicators, confirm the thesis of an imminent correction.
= Why this is so, that I explain after the introduction.
The DXY / USD has a non-negligible impact on EUR /USD, as the whole economy depends on its behavior.
> Meanwhile, this seems to take run-up, for a final upswing, which could bring the precious metal under massive selling pressure.
> Regardless of these selling pressures coming from the USD, SILVER has been somewhat caught at a very strong resistance, which foreshadows a falling price.
In the following, the analysis goes into detail, so that the significant levels and areas are known to you.
For this purpose, I have performed a "MULTI-TIME-FRAME" analysis, which refers to the higher time units (month & week) and thus makes the big picture visible.
Normally all time units below "1h" are called noise, but even a - 1h-4h - analysis is of no use to you, if the knowledge about the big and whole is missing.
> We traders know that no one can predict the future and that is exactly why you have to be prepared for all initial situations.
> If the DXY should rise again, that means "BLOOD" for the traditional and crypto markets.
> This creates dangers, but also opportunities - it is important to look at the big picture.
> Which levels are RELEVANT, I have explained in detail in the following pages.
Table of contents
1st part = INTRODUCTION
2nd part = TECHNICAL ANALYSIS
= Monthly - Time frame
= Weekly - Time frame
3rd part = CONCLUSION
PART ONE
"INTRODUCTION"
After "EUR/USD" formed a top at - 1.235 - in January|2011, a strong sell-off has been unleashed after a retest of the level.
> This sell-off completed in September|2021 and formed our current bottom.
> That the pair was in a "Symmetrical Triangle", many seem to forget at the moment, which is why I hereby again explicitly refer to it (marked in purple in the picture.).
> The breakout of the triangle was the reason for the strong sell-off and is just challenged by the price again.
> In recent weeks, we have seen a very strong upward movement, which I believe could be on the verge of a correction.
= We are at the lower resistance line of the previously mentioned "symmetrical triangle" which played a major role from 2017 to 2022 |.
= Significant FIBONACCI levels and SUPPLY zones, are located in the zone and thus represent a magnet for institutional investors.
= This means translated that the price can bounce off the "Symmetrical Triangle". However, it cannot be ruled out that the institutional investors, will take the liquidity located at the "magnet levels."
= To get some clarity, we must wait for the reaction of the DXY, which will decide the following course of the EUR and the economy.
= The "DAILY" - MACD + RSI - both show divergences, which further strengthens the correction thesis.
> This divergence is seen in many other pairs trading against the USD, which further supports the thesis of a sell-off.
> Once you look at the DXY (USD index) on the higher timeframes, the further sell-off in the traditional markets becomes even more likely.
(My DXY analysis is linked below this post, for confirmation purposes).
SECOND PART
TECHNICAL ANALYSIS
For the analysis of the higher time levels, I proceed according to the onion-skin principle.
> MONTH - level > WEEK - level > DAY - level
These are divided into
> SUMMARY > CHARTS
The charts are presented in logarithmic scaling, as the given information can be visually presented in a more harmonious way.
(This also refers to Fibonacci levels.)
1st MONTH – Time frame
SUMMARY
The trend channel shown in the chart, in turquoise, was formed since 1978 and since then it was able to maintain itself as a legitimate trend channel. Its mid-trend line showed reactions when confronted and was respected by the market.
> The price is outside and had given up in 2018 after unsuccessful attempts to recapture the channel, initiating the MAKRO sell-off.
The earth colored trend lines drawn, formed in 2003 + 2008 and served as support or resistance since then.
> Price is running into the resistance line (2008) and may be facing the next major task with it.
The in the chart, drawn in purple - "Symmetrical Triangle", formed since 2017 and directed the price since then.
> The price broke through the triangle in April | 2022 and is currently demanding recovery.
The red colored trend line formed in 1992 and represents an inconspicuous but relevant level.
> If you look at the past of this trendline, you can see quite quickly what strong influence it played.
When we go into more detail about the "SUPPLY & DEMAND" zones, you can look at the "DEMAND" + "SUPPLY" zones I highlighted on the chart.
> D|1 - Zone | STRONG = followed a strong move + bounced off lower support line.
> D|2 - Zone | VERY STRONG = followed extremely - Strong move + origin 2001.
> D|3 - Zone | VERY STRONG = followed extreme - Strong move + origin 2001 + quarterly zone
> S|1 - Zone | WEAK = occurred during sell-off, not the trigger.
> S|2 - Zone | STRONG = followed a strong move + prominent FIB level + symmetrical triangle + quarterly zone
> S|3 - Zone | STRONG = followed a strong move + prominent FIB level + symmetrical triangle + quarterly zone
> S|4 - Zone | VERY STRONG = followed extremely - strong + macro FIB level
Fibonacci retracements should serve us as additional confirmation, and have been considered in past movements (last decades).
> FIB 1 | will serve as the strongest resistance should the price attempt another run up. > FIB level
> FIB 2 | are the possible resistance targets, which would be feasible in case of a successful breakout of the "Symmetrical Triangle".
> In combination with the 0.328 FIB from the MACRO FIB Level a very strong resistance.
> FIB 3 | are the next correction targets, which become relevant in case of a direct sell-off (immediately after this analysis).
> FIB 4 | is a strong MACRO support level (0.88), for a further sell-off.
Past highs and lows usually serve as resistance/support, one of which we have.
> HIGHER HIGH [2020 - Bullish Market Structure = Confirmation = Resistance
> LOWER HIGH | 2017 - Bullish Market Structure = Beginning = Resistance
Some levels of interest are in front of us, which in the last months + years, played a strong role for the market.
> The currently most relevant - POI (1.145 USD) - represents an important mark already since the year 1980 and thus takes a currently very strong resistance role.
> The other POIs are by no means negligible and will play a role in the price development in the coming days, weeks and months. (Therefore, take your time and transfer the ones that are relevant for you into your chart).
CHARTS
Overall picture
Overall picture without POIs + MSBs
ATTENTION
In the following time levels, I will only deal with the NEW, added elements..
2nd WEEK – Time frame
SUMMARY
The monthly "SUPPLY & DEMAND" zones are joined by others from the weekly view that coincide with other resistance / support elements.
> D|1 - Zone | WEAK = is a Rally-Base-Rally Zone, but additional resistance support by MSB (2020) + Trend line (Red)
> D|2 - Zone | STRONG = followed a strong move + prominent FIB levels
> S|1 - Zone | STRONG = followed a strong move + prominent FIB level + MACRO FIB + trend line resistance (earth colors)
> S|2 - Zone | VERY STRONG = followed extremely - strong + macro FIB level + "symmetrical triangle" resistance line
*** In addition, no further addition is needed, as the levels from the monthly level also cover the weekly perspective.
THIRD PART
CONCLUSION
"And all without need - the euro is the EU's death."
If necessary, this saying refers to the fact that the EURO was never intended to be a permanent currency, but only a transitional one.
What this could mean on the future course of the exchange rate, everyone should think about.
In summary, it can be said that based on the technical analysis, there are strong reasons for a long-term - falling EURO rate.
> Since the price top in Jan|2021 - the quarterly candles were dominated by bearish and the current movement looks more like a rebound.
> A possible breakout of resistance elements is possible, but should meet strongest resistance at 1.131 - at the latest. (I have marked this "death zone" with a "purple" area in the cover image).
> The divergences in the daily RSI + MACD, suggest a bearish sell-off.
For this reason, I assume a weak EURO exchange rate and a strong USD and an accompanying bloodbath in the traditional and crypto markets.
> Positioning after confirmation of this thesis = SHORT.
If this idea and explanation has added value to you, I would be very happy to receive an evaluation of the idea.
Thank you and happy trading!
ZIEL IST DIE AUTARKIE | THE GOAL IS SELF-SUFFICIENCY
Note
After the - EUR / USD - bounced off resistance for the first time, it is now on the second attempt to break through it.The next target is the area highlighted in the ANALYSIS between | 1.20 - 1.35 | here we should expect very strong resistance.
= You can see exactly which resistances are waiting there in the previous analysis.
However, the decision for further action will depend on the performance of the DXY.
UPDATE
Note
In my analysis, I mentioned that we could take the liquidity of the "purple box" before a "higher time frame" sell-off. > The price has not managed this in the end, for reasons of missing momentum.
After now on the higher time levels, a clear divergence in the MACD is to be seen and the USD stands on the higher time levels before important resistances, we stand before a momentous decision of the markets.
> If these resistances are successfully broken, it will be very dark for the Traditional / Crypto markets.
> If the currently existing momentum is not enough, we will get the sell-off after a short recovery.
On the smaller timeframes (intraday), we can see bullish divergences, which suggest a short-term recovery.
> Additionally, the volume profile confirms a strong support area.
= Therefore, my conclusion is that we will see a rise in the EUR in the short term.
= From a long-term perspective, my SHORT IDEA has not changed.
TRADE
Anyone who wants to take a - LONG position - in EUR/USD can follow my published IDEA, which is attached by means of a comment below this comment.
As soon as it becomes apparent that we will reach the TOP of the movement, I will publish a separate - SHORT IDEA.
SHORT IDEA
4 H - TF | BULLISH DIVERGENCE
1 D - TF | VRVP (Volume Profile)
LONG TERM
1 T - TF | BEARISH DIVERGENCE
3 T - TF | BEARISH DIVERGENCE
1 W - TF | VRVP (Volume profile)
Note
Concerning the currency pairs - EUR & USD - a lot has happened lately, which is why I am updating this post earlier than intended.> You can see which areas are and will be relevant in the following chart images:
> If you have a question, want to criticize something, or have not understood something, please contact me via the comments.
W1 - VOLUME - RESISTANCE
W1 - 200 SMA - RESISTANCE
D3 - FIB - TARGET ZONES
D3 - DIVERGENCE - BEARISH
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