Best of the Week
Most Popular
1.Will UK Interest Rate Rises Crash House Prices? - Nadeem_Walayat
2.Full on Crash Alert for Major World Stock Markets... - Clive_Maund
3.Gold And Silver Market Bottoming? Big Rally Imminent? Reality Check Says NO - Michael_Noonan
4.The Coming Silver Price Rally Will Outperform All Previous Ones - Hubert_Moolman
5.The Trigger For The Upcoming Stock Crash - Harry_Dent
6.Imploding Department Store Results - James_Quinn
7.Dr. Copper is Speaking, are you Listening? ... - Rambus_Chartology
8.Pandemonium in the Stock Market, Dow falls 1,000 points in a week - EWI
9.Asia's Whirling Dervish of Devaluations Has Encircled China's Exports - Keith_Hilden
10.China Weakens the Yuan; Rattles Global Stock and Financial Markets - Gary_Dorsch
Last 5 days
EU Migration Crisis and Population Density, Why Cameron is Right, England Really is Full - 3rd Sept 15
Stock Market Return to Crisis: Things Keep Getting Worse - 3rd Sept 15
Dow Theory Stock Market Sell Signal Examined - 3rd Sept 15
How OPEC’s Attempt to Save Face Affects the Crude Oil Market - 3rd Sept 15
Crude Oil Price Forecast 2015 and 2016 - Video - 3rd Sept 15
The Real Threat from China’s Stock Market Crash - 2nd Sept 15
How Our “Mixed Economy” Created These Mixed-Up Markets - 2nd Sept 15
'Gravity' Is Returning to Stocks and Bond Markets - 2nd Sept 15
OPEC Divorce And Self-Destruction Thanks To Saudi Crude Oil Strategy? - 1st Sept 15
The Beginning Of A New Financial / Stock Market Cycle - 1st Sept 15
Three Things Every Master Trader Knows About Trading Options - 1st Sept 15
Chinese Yuan Revolution? - 1st Sept 15
Take Advantage of Record-High Auto Sales… Before This Bubble Bursts - 1st Sept 15
Pondering Hitler's Legacy - 1st Sept 15
Mainstream Media Goes Berserk - 1st Sept 15
Your Decisive Stock Market Plan to Follow Whilst Most Investors Shiver With Fear - 1st Sept 15
Are There Stock and Financial Markets Investing Opportunities For The Remainder Of 2015 - 1st Sept 15
Crude Oil Price Forecast 2015 and 2016 - 1st Sept 15
REPO Window Hidden $Trillion QE Monthly Volume - 31st Aug 15
Silver and Warnings From Exponential Markets - 31st Aug 15
Stock Market Calls Fed’s Bluff - 31st Aug 15
Why Some ETFs Led the Stock Markets Down Last Week - 31st Aug 15
Stock Market Collapse - Take The Opportunity To Bail Before It’s Too Late! - 31st Aug 15
The Most Important Market Chart on The Planet - 31st Aug 15
Stock Market 50% Retracement - 31st Aug 15
Stock Market Crash Red Alert for 2nd Downwave... - 31st Aug 15
Independant Scotland 1 Year on, UK Civil War If the SNP Fanatics Had Succeeded - 30th Aug 15
Gold’s 7 Point Broadening Top - 30th Aug 15
The Day the Stock Market Shook the Earth: Takeaways From the Dow’s 1,000-Point Drop - 30th Aug 15
Gold Price Rally Marked by Short Covering - 30th Aug 15
Aging Stocks Bull Market - 29th Aug 15
Economic Destabilization, Financial Meltdown and the Rigging of the Shanghai Stock Market? - 29th Aug 15
The Stocks You Should Be Buying After the Market Drop - 29th Aug 15
How I Learned to Stop Worrying and Love Market Fluctuations - 28th Aug 15
China's Yuan Devaluation: Why It Was "Expected" - 28th Aug 15
Stocks Go Nuts But the Question Remains – Will the Rally Stick? - 28th Aug 15
Fed’s Stock Market Levitation is Failing - 28th Aug 15
The Eight Energy Systems Driving The Stock Market Rout - 28th Aug 15
Silver Sold, then Squeezed - 28th Aug 15
U.S. Economic Fundamentals 'Look Good' - Bullard of St. Louis Fed - 28th Aug 15
Stock Market Margin Calls Mount - 28th Aug 15
Einstein, Physics, Gold and The Formula To End Economic Decay - 28th Aug 15
The 10 Best Stocks for Options Trading Plays in This Market - 28th Aug 15
Economics of a Stock Market Crash - 28th Aug 15
Currency Wars Detonate; Gold Refuses to Budge - 28th Aug 15
UK Immigration Crisis Hits New Record, Trending Towards Becoming a Catastrophe - 28th Aug 15

Free Instant Analysis

Free Instant Technical Analysis


Market Oracle FREE Newsletter

Global Stocks Slide

Euro Signs Of Caution For Upside Move

Currencies / Euro Feb 20, 2013 - 03:16 PM GMT

By: Michael_Noonan

Currencies

Oftentimes, first impressions are the best because the perceived information strikes the mind unfiltered by second and third impressions that may begin to second-guess the first. The weekly and daily charts of the Mar Euro are first impression expressions.

Many will look at this weekly chart, well, maybe not so many, but of those who do, they will see that the recent high rallied above the February 2012 swing high and conclude the Euro is acting well. We would disagree, and here is why.


What caught our eye was the steep decline within the box, noting how fast the rate of acceleration was on the decline. Every succeeding weekly high was lower than the one before it for 11 straight weeks. Sellers were clearly in control, and when challenged on the next rally, they will defend their "territory." The largest of all the bars is the first one that began the sell-off. The next bar after it was a failed rally against it.

The challenge to that seller's control area is now, or a few weeks ago. Recent price stopped right at where the acceleration and failed rally began. You can see how the Euro is in an uptrend since last July. The solid, lower support TL captures the trend. We drew a second, parallel supply line using the September 2012 swing high and extending it by dashed lines to reflect the fact that it is projecting into the future, from that point in time.

When price fails to reach the upper channel line, it is the market's way of telling us that the trend has weakened. It does not mean it is over, just a little weak. That leads us to the second observation that caught our eye, as it related the accelerated move down.

Two weeks ago, you can see a wide range bar down on a sharp increase in volume, right after the high, and it closes poorly. This should not happen if buyers are in charge, and the market may be sending an important message, once again.

We want to take a closer look at daily activity to determine if the character or this not-so- strong rally is in jeopardy. We say not so strong because the move up has been somewhat labored, backing and filling. Contrast it with the accelerated decline.

Markets do not lie. What they do is generate information that tells us what participants are doing in their buy/sell decisions. A similar channel has been drawn on the daily, and price reached an overbought condition on the first TD of February. [Trading Day]. Look at what happens next day. Not only is there no follow-through, price opens under the previous day's close and declines all day. What happened to the buyers?

We mentioned the wide range bar down, [weekly] and we see how it began on 7 February, accompanied by the highest volume for the contract. It pays to heed high volume days because they are an expression of increased activity between buyers and sellers, and who wins the battle can be important, even more important when it occurs at a certain area, like the current swing high.

The market continues to provide us with additional information over the next 4 TDs, with the 4th one culminating what can only be described as a week rally response to the wide range decline on heavy volume. Note where price closed on that day, 5th bar from the end.

The decline has found some support at the trend line, which should be expected, but more because of the small trading range in the middle of January that should act as support, or at least a buffer against a decline.

What may be key for Euro traders is how the market reacts from this week's low, so far. The character of the rally will say whether to expect higher prices to come, or abandon the buy side. In fact, depending upon how any rally may develop, the market could also be advertising a short sale. There is some history behind the reasoning that goes back to that area of acceleration a year and a half ago. It would be a mistake to overlook it.

By Michael Noonan

http://edgetraderplus.com

Michael Noonan, mn@edgetraderplus.com, is a Chicago-based trader with over 30 years in the business. His sole approach to analysis is derived from developing market pattern behavior, found in the form of Price, Volume, and Time, and it is generated from the best source possible, the market itself.

© 2013 Copyright Michael Noonan - All Rights Reserved Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.

Michael Noonan Archive

© 2005-2015 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

Biggest Debt Bomb in History