Friday, 29 May 2015
Click on image to enlarge.
The Normal Zone for EUR/USD lies between $1.1 and $1.4. In normal course, I would expect the Euro to rebound from its present level of c. $1.1, and swing around its mid-point of $1.25. The main pressure for it to continue its downtrend is the imminent increase in USA interest rates, while the European Central Bank clings to Zero Interest Rate Policy. Toss the coin: I bet it goes down.
Tuesday, 26 May 2015
Click image to enlarge.
The uptrend of the Euro against the US Dollar seems to have aborted, and the Euro plunges towards parity with the Dollar.
Causes for the change:
- Great Britain prepares contingency plans for leaving the EU (so what? Just the effects this story has on sentiment);
- The Greek government announces its intention to default on IMF payments (hardly unexpected);
- European Central Bank announces intention to double its Quantitative Easing (clever damper on the surge of the Euro); but,
- More importantly, better economic figures from USA and FED hints that its interest rates may increase as early as September 2015.
Blocks on EUR/USD journey towards parity occur about now ($1.085), and, again, around $1.05.
Thursday, 21 May 2015
On 1 Apr 2015, I dared to predict that the downtrend of the Euro against the US Dollar was at an end and that an uptrend would now start. I drew a blue triangle tentatively predicting an uptrend symmetrical to the finished downtrend. This was modified in my post of 16 Apr. Four days ago, I noted that the uptrend had become too steep and that there was plenty of scope for a correction. The correction, I reckon, has now finished, and the EUR/USD will resume its upward path.
Sunday, 17 May 2015
Click on image to enlarge.
Line B is parallel to previous up-slope A. The present upslope is much steeper. While the 30-month Moving Average suggests that there is a long way to go before the up-slope needs to be corrected by a significant down-swing, the scope for down-swings is significant. A downswing could be triggered by a political event, such as Greek default.
Thursday, 7 May 2015
The Chart shows the price movement of EUR/USD since 1993 and the 30 month Moving Average. The upward march of the Euro has a long way to go to cross the Moving Average. It should continue through the Moving Average, to peak around $1.3 in 2017.
Wednesday, 6 May 2015
On 1 Apr 2015, I drew a blue triangle on the graph of the EUR/USD, predicting that the downtrend would end and guessing the shape of the coming uptrend (i.e., to mirror the retired downtrend). A week later I predicted that the graph would bounce off Line A, but, days later, had to amend my guess that it would bounce, instead, off Line C. Then, I had to move my blue triangle over to the right. Over-all, the uptrend is on course. Since the Greek crisis gets worse and worse, we have seen, as I guessed, that this would have little effect, the main force in the market-place now being the necessity for the American Dollar to lose value against other currencies. As with other trends, this one will overshoot the mark, i.e., continue for some months at least.