Best of the Week
Most Popular
1. Gold vs Cash in a Financial Crisis - Richard_Mills
2.Current Stock Market Rally Similarities To 1999 - Chris_Vermeulen
3.America See You On The Dark Side Of The Moon - Part2 - James_Quinn
4.Stock Market Trend Forecast Outlook for 2020 - Nadeem_Walayat
5.Who Said Stock Market Traders and Investor are Emotional Right Now? - Chris_Vermeulen
6.Gold Upswing and Lessons from Gold Tops - P_Radomski_CFA
7.Economic Tribulation is Coming, and Here is Why - Michael_Pento
8.What to Expect in Our Next Recession/Depression? - Raymond_Matison
9.The Fed Celebrates While Americans Drown in Financial Despair - John_Mauldin
10.Hi-yo Silver Away! - Richard_Mills
Last 7 days
Silver Springboards Higher – What’s Next? - 26th May 20
Stock Market Key Resistance Breakout Is Where the Rubber Meets the Road - 26th May 20
5 Ways To Amp Up Your CFD Trading Today - 26th May 20
The Anatomy of a Gold Stock Bull Market - 26th May 20
Stock Market Critical Price Level Could Soon Prompt A Big Move - 25th May 20
Will Powell Decouple Gold from the Stock Market? - 25th May 20
How Muslims Celebrated EID in Lockdown Britain 2020 - UK - 25th May 20
Stock Market Topping Behavior - 24th May 20
Fed Action Accelerates Boom-Bust Cycle; Not A Virus Crisis - 23rd May 20
Gold Silver Miners and Stocks (after a quick drop) Ready to Explode - 23rd May 20
3 Ways to Prepare Financially for Retirement - 23rd May 20
4 Essential Car Trade-In Tips To Get The Best Value - 23rd May 20
Budgie Heaven at Bird Land - 23rd May 20
China’s ‘Two Sessions’ herald Rebound of Economy - 22nd May 20
Signs Of Long Term Devaluation US Real Estate - 22nd May 20
Reading the Tea Leaves of Gold’s Upcoming Move - 22nd May 20
Gold, Silver, Mining Stocks Teeter On The Brink Of A Breakout - 21st May 20
Another Bank Bailout Under Cover of a Virus - 21st May 20
Do No Credit Check Loans Online Instant Approval Options Actually Exist? - 21st May 20
An Eye-Opening Perspective: Emerging Markets and Epidemics - 21st May 20
US Housing Market Covid-19 Crisis - 21st May 20
The Coronavirus Just Hit the “Fast-Forward” Button on These Three Industries - 21st May 20
AMD Zen 3 Ryzen 9 4950x Intel Destroying 24 core 48 thread Processor? - 21st May 20
Dow Stock Market Trend Analysis and Forecast - 20th May 20
The Credit Markets Gave Their Nod to the S&P 500 Upswing - 20th May 20
Where to get proper HGH treatment in USA - 20th May 20
Silver Is Ensured A Prosperous 2020 Thanks To The Fed - 20th May 20
It’s Not Only Palladium That You Better Listen To - 20th May 20
DJIA Stock Market Technical Trend Analysis - 19th May 20
US Real Estate Showing Signs Of Covid19 Collateral Damage - 19th May 20
Gold Stocks Fundamental Indicators - 19th May 20
Why This Wave is Usually a Market Downturn's Most Wicked - 19th May 20
Gold Mining Stocks Flip from Losses to 5x Leveraged Gains! - 19th May 20
Silver Price Begins To Accelerate Higher Faster Than Gold - 19th May 20
Gold Will Soar Soon; World Now Faces 'Monetary Armageddon' - 19th May 20
Gold Mining Stocks Fundamentals - 18th May 20
Why the Largest Cyberattack in History Will Happen Within Six Months - 18th May 20
New AMD Ryzen 4900x and 4950x Zen3 4th Gen Processors Clock Speed and Cores Specs - 18th May 20
Learn How to Play the Violin, Kids Activities and Learning During Lockdown - 18th May 20
The Great Economy Reopening Gamble - 17th May 20
Powell Sends a Message With Love for Gold - 17th May 20
An Economic Renaissance Emerges – Stock Market Look Out Below - 17th May 20
Learn more about the UK Casino Self-exclusion - 17th May 20
Will Stocks Lead the Way Lower for Gold Miners? - 15th May 20
Are Small-Cap Stocks (Russell 2k) Headed For A Double Dip? - 15th May 20
Coronavirus Will Wipe Out These Three Industries for Good - 15th May 20
Gold and Silver: As We Go from Deflation to Hyperinflation - 15th May 20

Market Oracle FREE Newsletter

Coronavirus-stocks-bear-market-2020-analysis

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

© 2005-2019 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

6 Critical Money Making Rules