Friday, 19 December 2014
Stuck at Support Line A for the last while, there was doubt as to whether the Euro would continue to fall against the US Dollar, as market pressures would suggest, or whether the chart would bounce off Line A. Yesterday's downswing brought the chart clearly through Support Line A. The doubt is over. The Euro will continue its dive (with occasional pausses) until it reaches Support Line B, at around $1.12.
Wednesday, 17 December 2014
Click chart to enlarge.
At the top of an upswing, the chart indicates the Euro today swinging down against the US Dollar.
Some easing of the rate of the downtrend is seen in the recent oscillations, shaded on the chart.
The security is now in a strong Long-term Support Zone, but economic pressure surely continues to strengthen the Dollar against all comers.
Today's FOMC meeting can hardly stop the trend. We wait to see how low the present Downswing will go: will its bottom indicate a strengthening of the downswing, or further evidence of a parabola bottom forming?
Monday, 15 December 2014
Click to enlarge image.
Joining the graph bottoms gives a neat parabolic shape, indicating that the Euro downtrend against the US Dollar is gradually coming to an end. This idea will be strengthened if the coming week's downswing bounces off the parabola.
Joining the tops gives another parabolic shape, but not entirely parallel with the Supporting parabola. In fact, the two parabolas are converging. Obviously, either the Resistance Line (the top parabola) or the Support Line (the bottoms parabola), must be breached in the coming weeks.
I expect the downtrend to continue for a few more months due to the downward pressures on the Euro against the Dollar. My confidence in this prediction will be boosted if the Supporting parabola is breached.
Thursday, 11 December 2014
Yesterday's rise in the Euro against the US Dollar forces us to have another look at our prediction that the EUR/USD would continue its plunge for several more months. The last downswing ended prematurely and yesterday's upswing broke through the One-year Resistance Line.
Joining the recent tops and bottoms indicates that the downtrend slope may be moderating, and perhaps a parabola bottom forming. Nevertheless, the Euro is to continue its ZIRP and QE, which the Dollar is forsaking..The EUR/USD will, of course, now swing down again, but it remains to be seen if it will break through the new Support Line and continue its plunge as far as the One-year Support Line.
Tuesday, 9 December 2014
DIA (Dow Industrials ETF) fell strongly over the last two days. My chart shows a Resistance Line and Support Zone based on performance for one year. The price fell only to the top of the Resistance Zone today. If this is just a downswing and not the commencement of the expected Big Dip, then the graph will bounce back from either the top or the bottom of the Support Zone. We watch to see what will happen next.
Monday, 8 December 2014
Thursday, 4 December 2014
Today's bounce in the Euro, in immediate response to Draghi's speech, is, in my view, just a mini spike, caused by Bulls waiting for an excuse to buy. The graph has turned down at this minute in time, and will continue downwards.
The Dow fell dramatically today. I wait to see if it will break through the Support Line before proclaiming (once again) that the Big Dip is commencing. Image shows DIA (Dow Industrials ETF), 3-month graph. Click on the image to enlarge.
Wednesday, 3 December 2014
Click to enlarge image.
Today, the Euro dropped dramatically against the US Dollar, breaching long-term Support Line A, as I had predicted. Next stop is Support Line B (at c. $1.1) or even Support LIne C (at c. $1.05)
Tuesday, 2 December 2014
Continuing from my last post, this long-term chart shows the history of the Euro, against the US Dollar, to date. Shaded is its normal zone, over its lifetime, between $1.1 and $1.4.
We get a Resistance Line by joining the tops and a Support Line from joining the Bottoms. Everything in nature forms patterns, and the normal pattern for share prices is to swing up and down between these two lines, while following an overall upward or downward trend. The present Support Line and Resistance Line are converging, which means that the chart must break through one or other fairly soon, falling back into the constraints of the longer term trend lines.
Normally the chart would, at the present moment in time, bounce off the Support Line once more, following the amber broken line. However, the expectation that the US will abandon Zero Interest Rate Policy (ZIRP) sometime soon, while the Euro Zone will continue this policy, will probably cause the chart to break through the Support Line now following the blue broken or dotted line. The downtrend would then continue until the lower bound of the normal range is reached.