This past February, we offered our predictive analysis which was calling for a renewed rallying at a time when a major reversal was already being considered. In addition to this directional signal, we also offered two distinct targets, namely:
1 - "TG-1 = 38632 - 15 FEB 2014", colored orange indicating moderate probability
and
2 - "TG-High = 1.38997 - 15 FEB 2014", colored red indicating low probability.
As of this writing (Saturday, March 01st 2014, 3pm CST), the chart has demonstrated that our bullish direction was met, while our targets are nearing - See analysis here: tradingview.com/v/dCviDOt3/).
Now the question is: "Will price break the 2,051 day old, or 293 week-old bearish trendline that has submitted price to a sustained bearish trend since the 1.6030 height reached on July 13th 2008?
INSTITUTIONAL ANALYSIS - MAJOR BANKS ARE EUR/USD SHORT:
Here are the numbers, as far as major bank short positions in the Euro:
1 - BNP Paribas - Short from 1.3727: T/P @ 1.32 S/L @ 1.394 Cat.: Macro Term: Medium
2 - Commerzbank - Short from 1.376: T/P @ 1.3575 S/L @ 1.3775 Cat.: Technical Term: Short
3 - JP Morgan - Short from 1.376: T/P @ 1.313 S/L @ 1.390 Cat.: Technical Term: Medium
4 - Morgan Stanley - Short from 1.375: T/P @ 1.330 S/L @ 1.385 Cat.: Macro Term: Short
5 - Barclays - Short from 1.367: T/P @ 1.340 S/L @ 1.38 Cat.: Macro
6 - Citi - Short from 1.3692 T/P @ 1.330 S/L @ 1.393 Cat.: Technical Term: Medium
7 - Credit Agricole - Short from 1.378 T/P @ 1.330 S/L @ 1.416 Cat.: Macro Term: Medium
(Source: eFX News)
In all, there are 7 banks with a total of 9 open positions. 5 are based on macro-economics, while 4 are based on technicals. 2 are short-term, 7 medium. Morgan Stanley aims for the longest at 1.31 vs. a conservative 1.3575 in Commerzbank (Source: eFX News).
In light of this predominantly institutional bearish outlook, traders might re-consider any long position, which is what our predictive analyses and forecasting have been preparing to do as we near our target.
TECHNICAL ANALYSIS - A SIMPLE CASE OF OVERHEAD RESISTANCE:
A resilient bearish trendline stretching from July 13th 2008 apex extends forward to the present, should put into doubt any bullish continuation past its level.
From a pattern standpoint, a potential bearish Cypher, Shark or Gartley dominate the end portion of the price action in the daily chart. Either one of these patterns define their potential reversal zone ("PRZ") narrowly close to that overhead resistance as well as our own "TG-1 = 1.38632 - 15 FEB 2014" and "TG-High = 1.38997 - 15 FEB 2014".
In the Weekly chart, price prepares to complete a Wolfe Waves Pattern. In any case, there are plenty of corroborating technical events defining this end of price action as representing a high-probability reversal area, close to that PRZ defined above.
OVERALL:
Although our targets are nearing and TG-1 = 38632 is likely to be hit, we are changing our sentimental bias from bullish to bearish, and cautiously change TradingView's "Market Direction Signal" comment from Bullish to Neutral.
Cheers,
David Alcindor TradingView.com Moderator, Alias: 4xForecaster Predictive Analysis & forecasting
----------------------------------------------------- Follow our forecasts, signals and analyses on Twitter Alias: @4xForecaster -----------------------------------------------------
Disclaimer: Forecasts, analyses and directional opinions generated herein are for educational purposes only and are not trading recommendations. We trust that you will do your own due diligence first, then seek professional advice from a licensed professional, then enter the market at your own perils - David Alcindor - TradingView.com Alias: 4xForecaster
Комментарии
mustard
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Too much, I'm short from 1.3820, got a headache with all this.
Ehab
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I agree with you , traders are bullish , but from the macro view the unemployment and higher Eur will hurt the economy , the problem of European union is not over at all high debt to GDB , higher unemployment , bad banking sector , all of this make me agree that Eur can go down in medium term !
LEONES
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I'm long - see your weekly chart, there is still some space to the upside (1.3950). But I agree reversal could be close.
nihal.bhat.7
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just depends on what big boys do. eur is way overvalued fundamentally. its rate is zero.
aceofswords
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Hi David..... As much as I wholeheartedly agree that technically its perfect timing for the euro to 'turn tail' at this landmark juncture, [and also should do from a purely geopolitical point of view] in the very, very near term, I too have made some observations related to the various short positions held by the major banks you have listed, two of whom, [Barclays and Commerzbank], were knocked out of the game on Friday 28th February, I just cant help thinking that they have left 'sitting duck' targets for the market to aim for in the event of a rebound after an initial pull back, before the downtrend truly recommences in earnest.
Aided by the upward thrust created as the stop levels are taken out, price may be given enough of a power boost to break through the long term trend line from 2008/9, [this timeline being significant in itself, for obvious reasons], If only to prove a point. Once/If breached, there is a high probability that 'natural' market dynamics could take over and attempt a stab at 1.40+ .This would then leave just Credit Agricole's in play.
Add to the mix, the ECB's pressing 'will they, won't they' decision regarding any further easing, [which is looking increasingly more unlikely] and this weeks high impact Eurozone data releases and an upsurge, albeit potentially short-lived, continues to look feasible. Time will tell, but I think we can agree that the upcoming week will be pivotal in more ways than one. ;0) tradingview.com/v/MujT1oKN/
4xForecaster
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@aceofswords - "Add to the mix, the ECB's pressing 'will they, won't they' decision regarding any further easing, and this weeks high impact Eurozone data releases and an upsurge, albeit potentially short-lived, continues to look feasible. Time will tell, but I think we can agree that the upcoming week will be pivotal in more ways than one."
Absolutely right, right on. In fact, the trendline is made just too easy to comply to, so a transgression of that trendline will certain cause the market to cover and push it to new heights, as a contrarian - albeit very real - scenario.
David
nihal.bhat.7
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thats right. this market does not move on fundamentals(has it ever, euro 38% premium to USD, but no rate premium).
4xForecaster
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FUNDAMENTAL DEVELOPMENT
- NOT TIME TO WAGE WAR:
Besides the minority of "Macro" reasons behind these institutional short positioning, the dominant features of the Eurozone remains investors' doubt of any meaningful recovery.
Even a bullish economic outlook from the German dominance holds little weight against a general sense that France, Spain and Italy have major structural impairment to join the German solitary fanfare. Plus, let's consider important internal and external structural wounds that are sure to continue to handicap any Eurozone countries: Aging population, a socially taxing unemployment rate and many other social entitlement benefits sucking the soul and coffers dry ... And now comes a new European conflicts that despite seeming to be at the fringe of the EZ borders, will still call for a defining position of Europe vis-a-vis Moscow.
The opinion here is that a sheepish stance will be net-zero for Ukraine (likely under a diplomatic pretext of watchful containment) as Russia has far more financial resources and military willingness than the combined morale availability in Europe and its allies.
So, expect the European white flag of submission to offer a "neutral" background against that of the Russian's floating across Ukraine's skyline. In other words, who's got the most to lose and the most to spare?