The Euro: Long-Term Forecast (Part II)

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Part II

 I have always been against excessive complication of technical analysis methods.Having tested the majority of existing technical instruments, from the simplest to most refined, I have come to a conclusion over the long years of work that simpler methods most of the time perform better. So, here’s my advice:strive for simplicity.

John J.Murphy

 

 

Treat this figure as a sketch to see the general picture. Now we take our options calculated according to the standards of classical wave analysis and… Properly put them together into only three options. Let’s first group them.

Option 1. Upwards. (Kt-1) - (Kt-2) - (Kt-3).

Quote Option 3. Wave (C) or Wave (1) in (III). Option 4. Wave (B) or (II) “running flat”. Wave (C) or Wave (1) in (III). Option 5. Double zigzag (double three).

Option 2. Flat.Flat-zone.

Involves movement in a sideways corridor defied by a support at 0.8225 – the 2001 historical high and a resistance at 1.6037 – the 2008 historical high. Here, the 2001-2008 trend is completed as the VTMT TS basic indicator showed Flat-zone along these levels. A sideways movement is characterized by that even when flat and extended corrections are formed, such as extended flat and expanding triangle, the price returns to the horizontal channel.

Option 3. Downwards.(Kt-1) …

Quote Option 1. Corrective triangle Option 2. Diagonal triangle

Please note that this involves TA of a global move. Now let’s look at an enlarged chart from the trading terminal and see the picture in more detail. To avoid confusion, I drew the lines of the global TA objects.

TA of options for the EURUSD global trend. 20 June 2010

Option 1. Upwards.(Kt-1) …

The movement is developing along the future line (Кt-1)within the global analysis of (Кt-1) - (Кt-2) - (Кt-3). Remember what I wrote above.

Quote

The critical level is a 2010 local low at 1.1876. Please note that this option can be cancelled only by a sudden break and strong move of EURUSD below this level.I don’t rule out an option when flat corrections of various complexity are formed around levels at 1.1876 and 1.1639 (the 2005 low).So far, the currency has covered over 600 pips and is in the area of 1.2400.

Resistance levels along the future line (Кt-1):

- 1.3604. R1 of SAKS Channel Volatility Indicator;

- 1.4240. Quite a meaningful level, resistance of the sloping channel in case a corrective model is formed as a triangle;

- 1.5023. R2 of SAKS Channel Volatility Indicator;

- 1.5144. Local high. The starting point for movement along the line (Кт-3);

- 1.6037. The 2008 historical high.

- 1.6442. R3 of SAKS Channel Volatility Indicator;

- 1.6727. 61.8% of the move along the line of (КТ-3) of the global TA.

Option 2. Flat.Flat-zone.

The flat-zone is built by the indicator along the line of finished movement (Кt-1) - (Кt-2) and limited by a support at 1.2327 and a resistance at 1.5144. A sideways movement is characterized by that even when flat and extended corrections are formed, such as extended flat and expanding triangle, the price returns to the horizontal channel.

Option 3. Downwards.(Kt-1) - (Kt-2) - (Kt-3).

The movement can evolve as the existing three (КТ-1) - (КТ-2) - (КТ-3) within the global TA of (Кт-1). An extended correction can form as a triangle with a meaningful level for this option being a resistance of the sloping channel at 1.4240. A break and fortification above the level at 1.5144 will be critical for this model.

Support levels along the future line (Кt-3):

- 1.3604. Median of SAKS Channel Volatility Indicator;

- 1.1876. The 2010 local low;

- 1.1639. The 2005 historical high;

- 1.1358. 100% of the move along the future line (Кt-3);

- 1,0793. 161.8% of the move along the future line (Кt-3);

- 1.0766. S1of SAKS Channel Volatility Indicator;

- 0.9766. 200% of the move along the future line (Кt-3);

- 0.9347. S2 of SAKS Channel Volatility Indicator;

- 0.8225. The 2001 historical low;

- 0.8104. 261.8% of the move along the line (Кt-3);

- 0.7928. S3 of SAKS Channel Volatility Indicator;

- 0.7077. 300% of the move along the line (Кt-3);

Sources:

 

- charts of the global trend are based on data provided by Сonfinex;

- Learning materials and analytics from the VTMT Faculty; Masterforex-V Trading Academy.

- publications and materials of Market Leader.

This analytical feature represents the author’s opinion and may not serve as a basis for trading decisions.

This publication opens a series of features to analyze global trends.Naturally, other currency pairs will also be subject to such analysis. Good luck and profitable trading! Yours, ATEI.

 

 

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