Forex Charts

  Forex Technical Update EUR/USD Still Bullish after ABC Correction; 1.4450 is critical (7/5) EUR/USD - As the market trades into the European session, EUR/USD is being rocked. - The initial stage of the triangle scenario appears to be taking shape. - The 1H chart shows the market after a strong break below 1.4450 was then followed by a pullback. The pullback respected the previous consolidation area, and fell sharply back below the 200SMA to confirm the topping attempt. - The 1H RSI reading  shows the market establishing bearish momentum dipping below 30. - The daily chart shows the triangle scenario developing. The middle of this triangle is near 1.4330. - If the 1.4330 pivot is broken, the triangle support is projected conservatively to about 1.4250, and aggressively towards 1.42. - By that time, we should have completed a 5-wave triangle, ready for a breakout to the upside, following the direction of our previous trend. Information and opinions contained in this report are for educational purposes only and do not constitute...

EUR/AUD is moving down inside the highly Uniform Failing Wedge chart pattern identified by Autochartist on the daily charts. The Quality of this chart pattern is rated at the 3 bar level reflecting the following values of the individual contributing Quality indicators: low Initial Trend and Clarity (both measured at the 2 bar level) as well as the strong Uniformity (rated at the 7 bar level). The Higher uniformity of this Failing Wedge reflects even distribution of the connecting points of the upper and the lower trendlines of this chart pattern. This chart pattern is continuing the predominant downtrend visible on the daily and the weekly charts. The top of this chart pattern (Point A on the chart below) formed at the combined resistance made out of the round price level 1.4300 and the 50% Fibonacci Retracement of the sharp weekly down impulse that preceded this Failing Wedge (as is shown on the second chart below). Two of the connecting points...

EURUSD: 1.4345 Short-Term Trend: weak uptrend Outlook: EUR advanced early last week but once the daily Stochastics got overbought, it declined sharply onThursday and Friday. That is the typical price action when a Flat or Triangle is developing: once the market gets overbought during wave b, it then begins to decline in wave c. Now, if wave (c) is already under way, weakness twd 1.3720 is expected. Lower downside potential exits if this level is penetrated in a meaningful way. On the upside, only a move back abv 1.4570 negates, risks one more rally attemp twd 1.4700/50 before the sellers get control..... Strategy: Shorts favorable at 1.4400. Stop=1.4600. Target=1.3750.

In our previous posts, we discussed the evolution of real GDP per capita in selected developed countries. One of striking examples of dramatic changes is Ireland, where we predicted a deep fall many years ago. This prediction was based on the empirically justified concept of constant annual increase in real GDP per capita, G, in developed countries. We found that in the long run the trajectory of G is a linear function of time:   G(t-t0)= G0+B(t-t0)   where G0 is the initial level of GDP per capita at time t0 in a given country, B is the country dependent increment measured in (chained) dollars. Because of the constancy of the annual increment of real GDP per capita (in the long run) in developed countries we call this type of real economic growth the inertial growth. It is an analog of mechanical notion of inertia.   It should be noticed that the rate of growth, dlnG/dt, has to decelerate with time:   dlnG/dt = B/G   Empirically, the introduction...

There has been a lot of noise in both the alternative and the mainstream financial press regarding potential risk to the ECB regarding its exposure 48 cents on the dollar sovereign debt purchase through leverage at par. This concern is quite well founded, if not just over a year or so too late. In January, I penned The ECB Loads Up On Increasingly Devalued Portuguese Bonds, Ensuring That They Will Get Hit Hard When Portugal Defaults. The title is self explanatory, but I will do a deep dive later on int this missive. I will outline the concerns illustrated in the mainstream media over the last few days, but before I do, let’s do a deep dive into how thoroughly we at BoomBustBlog foretold and warned of the insolvency of both European private banks and central banks, including the big Kahuna itself, the ECB! The kicker is that this risk was quite apparently well over a year ago. On April...