Best of the Week
Most Popular
1. 2019 From A Fourth Turning Perspective - James_Quinn
2.Beware the Young Stocks Bear Market! - Zeal_LLC
3.Safe Havens are Surging. What this Means for Stocks 2019 - Troy_Bombardia
4.Most Popular Financial Markets Analysis of 2018 - Trump and BrExit Chaos Dominate - Nadeem_Walayat
5.January 2019 Financial Markets Analysis and Forecasts - Nadeem_Walayat
6.Silver Price Trend Analysis 2019 - Nadeem_Walayat
7.Why 90% of Traders Lose - Nadeem_Walayat
8.What to do With Your Money in a Stocks Bear Market - Stephen_McBride
9.Stock Market What to Expect in the First 3~5 Months of 2019 - Chris_Vermeulen
10.China, Global Economy has Tipped over: The Surging Dollar and the Rallying Yen - FXCOT
Last 7 days
Sheffield "Mi Amigo" Memorial Fly Past , BBC Crew Setting Up Stage for Breakfast TV Endcliffe Park - 21st Feb 19
Stocks Closer to Medium-Term Resistance Level - 21st Feb 19
The Stock Market’s Momentum is Extremely Strong. What’s Next for Stocks - 21st Feb 19
QE Forever: The Fed's Dramatic About-face - 21st Feb 19
Gold Technical Perspective – Why So Bullish? - 21st Feb 19
Sheffield "Mi Amigo" Memorial Fly Past at 8.45am on 22nd Feb 2019 - 20th Feb 19
Here’s The Real Reason You Stress About Money - 20th Feb 19
Five Online Marketing Predictions that will Matter in 2019 - 20th Feb 19
Has Gold Price Reached Upside Resistance Near $1340-1360? - 20th Feb 19
So Many Things are Not Confirming Stock Market Rally - 20th Feb 19
Forex Trading Management: The Importance of Being Prepared - 19th Feb 19
Gold Stocks are Following This Historical Template - 19th Feb 19
Here’s Why The Left’s New Economic Policies Are Just Stupid - 19th Feb 19
Should We Declare Emergency for Gold? - 19th Feb 19
Why Stock Traders Must Stay Optimistically Cautious Going Forward - 19th Feb 19
The Corporate Debt Bubble Is Strikingly Similar to the Subprime Mortgage Bubble - 18th Feb 19
Stacking The Next QE On Top Of A $4 Trillion Fed Floor - 18th Feb 19
Get ready for the Stock Market Breakout Pattern Setup II - 18th Feb 19
It's Blue Skies For The Stock Market As Far As The Eye Can See - 18th Feb 19
Stock Market Correction is Due - 18th Feb 19
Iran's Death Spiral -- 40 Years And Counting - 17 Feb 19
Venezuela's Opposition Is Playing With Fire - 17 Feb 19
Fed Chairman Deceives; Precious Metals Mine Supply Threatened - 17 Feb 19
After 8 Terrific Weeks for Stocks, What’s Next? - 16th Feb 19
My Favorite Real Estate Strategies: Rent to Live, Buy to Rent - 16th Feb 19
Schumer & Sanders Want One Thing: Your Money - 16th Feb 19
What Could Happen When the Stock Markets Correct Next - 16th Feb 19
Bitcoin Your Best Opportunity Outside of Stocks - 16th Feb 19
Olympus TG-5 Tough Camera Under SEA Water Test - 16th Feb 19
"Mi Amigo" Sheffield Bomber Crash Memorial Site Fly-past on 22nd February 2019 VR360 - 16th Feb 19
Plunging Inventories have Zinc Bulls Ready to Run - 15th Feb 19
Gold Stocks Mega Mergers Are Bad for Shareholders - 15th Feb 19
Retail Sales Crash! It’s 2008 All Over Again for Stock Market and Economy! - 15th Feb 19
Is Gold Market 2019 Like 2016? - 15th Feb 19
Virgin Media's Increasingly Unreliable Broadband Service - 15th Feb 19
2019 Starting to Shine But is it a Long Con for Stock Investors? - 15th Feb 19
Gold is on the Verge of a Bull-run and Here's Why - 15th Feb 19

Market Oracle FREE Newsletter

The Real Secret for Successful Trading

Euro Technical Analysis and the BrExit Vote

Stock-Markets / Euro May 08, 2016 - 10:11 PM GMT

By: Austin_Galt

Stock-Markets The Euro remains locked in a big consolidation phase and with the Brexit vote coming up I thought I’d take another look. Let’s look at one scenario on the daily chart that I think has some good potential going forward.


EURUSD DAILY CHART



We can see the messy price action consistent with corrective phases. As outlined in previous analysis, I expect one last move back down before the final surge into a high that will end the bear rally that began in March 2015. It still may be some time before this bear rally is indeed over.

We are following two broadening top formations - one large and one small. Let’s run through them.

The large broadening top shows point 1 to 4 already in place. Previously, I was looking for the bear rally to end with a point 5 high. I am now beginning to favour it will end with an even more bearish point 7 high. That means price is currently headed up to a point 5 high which should be marginally above the point 3 high set in August 2015 at 1.1714 and is denoted by the upper horizontal line.

Then price would need to come back down and marginally clip the point 4 low set in December 2015 at 1.0540. I would expect this point 6 low to also hold support at 1.0462 set in a March 2015 and is denoted by the lower horizontal line. Then the final surge into a point 7 high would commence.

The small broadening top shows price still tracing out its way to a point 3 high. After that, price should head back down to put in a point 4 low before embarking on its final mission to a point 5 high.

The Bollinger Bands show price has left the upper band and the middle band should provide support if this theory is to be proven correct.

The Fibonacci Fan drawn from the large point 4 low to small point 1 high shows this current move up finding resistance at the 76.4% angle and support at the 88.6% angle. Price is back down near the 88.6% angle and perhaps support will come in once again.

The RSI is in no man’s land while the MACD indicator looks to have just made a bearish crossover but caution always needs to be heeded during corrective phases as there are fakeouts galore.

As for the Brexit vote, as many of you know, I like to “guess” what the announcement will be based on the current technical position. We’ve had success with this before with the Greek No vote to the Euro and some US employment numbers. Also, in my article titled The Sixth Sense Of Markets, produced on 14th April 2015, I suggested the market has a sixth sense and the technicals often provide clues of what the fundamentals will be.

So, what to make of the Brexit vote?

If price is still relatively high then I would expect a vote to leave which would see the Euro trade down into the point 4 and 6 low. It would not matter if this result was expected or not. This is currently my favoured scenario.

If price is much lower, then perhaps the polls suggest a vote to leave is to be expected. If the vote is indeed to leave then price trades down a bit more but as it is expected it shortly thereafter reverses back up, putting the sellers on the wrong side fairly quickly. If, unexpectedly, the vote is to stay then obviously the Euro would surge into the point 5 and 7 high.

So, my technical outlook remains unchanged as long as support holds. Previous analysis has outlined this bear rally to terminate up above the 1.25 level and I expect the Brexit vote to fit itself in to this outlook.

By Austin Galt

www.thevoodooanalyst.com 

Austin Galt is The Voodoo Analyst. I have studied charts for over 20 years and am currently a private trader. Several years ago I worked as a licensed advisor with a well known Australian stock broker. While there was an abundance of fundamental analysts, there seemed to be a dearth of technical analysts. My aim here is to provide my view of technical analysis that is both intriguing and misunderstood by many. I like to refer to it as the black magic of stock market analysis.

Email - info@thevoodooanalyst.com 

My website is www.thevoodooanalyst.com 

© 2016 Copyright  The Voodoo Analyst - 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.

Austin Galt 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