EUR/USD: Look for Swing Point - A Cashmechanics Analysis by Al

At the time of last week's analysis the EUR/USD was trading at 1.37898. Our long term price analysis was bullish. The lower timeframe momentum indicators were bearish and we anticipated a short term decline of the EUR/USD over the next few days.

New York, NY (prHWY.com) November 15, 2011 - At the time of last week's analysis the EUR/USD was trading at 1.37898. Our long term price analysis was bullish. The lower timeframe momentum indicators were bearish and we anticipated a short term decline of the EUR/USD over the next few trading days that could potentially trade in a sideways corrective pattern (range). Our bias called for a minor rally of the EUR/USD that would trade above 1.38670; our exit strategy was predicated on the lower timeframe indicators which were bearish and we anticipated that a if the EUR/USD did not trade above 1.38670, and closed below 1.35077, it would then decline down to the minor bearish target zone of 1.34683 - 1.34568. The EUR/USD rallied to a high of 1.38580 and then subsequently declined to a low of 1.34837. In our timing analysis we were anticipating a significant swing point on the EUR/USD between 11/4/11 - 11/7/11 and also between 11/12/11 - 11/14/11 (there's a factor of +/- 2). On 11/10/11 the EUR/USD declined to 1.34837 and then rallied to a high of 1.38580. Our analysis of price and time allowed us to anticipate a decline of approximately 185 pips (11/4/11) and a rally of approximately 310 pips (11/10/11).


ANALYSIS

The EUR/USD continues to trade within its Bullish Pennant. The manifestation of the waves within the pennant appears to be unfolding in a larger degree 5-wave corrective pattern. This larger degree 5-wave corrective pattern is normal for a Bullish Pennant formation. Our long term bullish outlook hasn't changed and we're still anticipating a rally that will trade towards and potentially above the swing high of 1.51437. The manifestation of the rally from 1.31456 suggests that the decline from 1.49385 is more than likely a completed corrective decline. The minor weekly momentum indicators signal a potential choppy market over the next few trading days. Should the EUR/USD close below 1.35077 that will open the way for a decline back down to its minor bearish target zones of 1.34683 - 1.34568 & 1.32711 - 1.32419 and potentially retesting the lower trendline of the Bullish Pennant.

The rally from 1.31455 still appears to be unfolding as the 4th leg of the pennant. We are still expecting a 4th leg that will rally towards the upper trendline. The minor weekly momentum indicator is bearish suggesting a short term decline towards the bearish target zones is still a strong possibility. We will be watching this pattern much more closely and looking for additional clues during this week's chat room sessions.
Trading pennants can sometimes become very tricky and somewhat difficult. A suggestion would be to focus on the lower timeframe charts and look for a completion of a bearish pullback or retracement. The completion of the bearish pullback or retracement will be a signal that the higher timeframe bullish momentum may be resuming.

TIMING

With the EUR/USD trading within a Bullish Pennant, the higher timeframe timing projections allow us to anticipate a breakout of its Bullish Pennant may occur between 3/4/12 & 3/18/12 (there's a factor of +/- 2). The lower timeframe timing projections allow us to anticipate a major daily swing may occur between 11/13/11 - 11/15/11 & 11/17/11 - 11/18/11 (there's a factor of +/- 2). Timing projections allow us to be prepared for and to project a potential turning point in the marketplace.

Come join us during our daily chat room sessions as well as our weekly webinar series and observe the methodologies and strategies we use that allow us to make these types of projections. Now FREE all the time. Register at http://www.cashmechanics.com/chat-room-pay.html and receive access and the Chat Room discussion schedule.

###

Tag Words: forex trading, forex analysis, eu, cash mechanics, cashmechanics, usd

Categories: Finance

Press Release Contact
Cashmechanics.com, LLC,
80th Street
Brooklyn, NY 11209

Link To This Press Release:

URL HTML Code