Head and Shoulders warns of a lower EUR/USD | Forex Factory

  • Head and Shoulders warns of a lower EUR/USD

    see chart for analysis..... Dave

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theroller
Feb 21, 2007 8:17pm
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Even if this is a "chart setup", i believe fundamentals are more important.

Ex: Gold had the exact same setup, with the head at around 650. The price is 680 now, in two weeks, without a fall.

In this case, fundamentals are USD negative. 2 cents.
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smjones
Feb 21, 2007 8:31pm
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Based on your chart, the projected TP from this H&S would be about 1.3070
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Aspen Trading
Feb 21, 2007 9:58pm
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Quoting theroller
Even if this is a "chart setup", i believe fundamentals are more important.

Ex: Gold had the exact same setup, with the head at around 650. The price is 680 now, in two weeks, without a fall.

In this case, fundamentals are USD negative. 2 cents.
Fundamentals are important, however, in the next few weeks/months I cannot see the Eurozone coming up with better fundamentals. What is it you see that suggests Euro fundamentals are better than US currently?

More importantly USD has a higher yield than does EUR - given that this market is being driven by interest rates right now, the USD holds an edge in that category relative to EUR.

That is what makes it a market - just my 2 cents/euros

Dave
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athalon7
Feb 21, 2007 10:41pm
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What about the USD/CHF EUR/USD relationship? Since the correlation is almost -95 most of the time how does the Swiss play into your assumptions?
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Arpegius
Feb 22, 2007 1:04am
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Well, there's not just the H&S, we can see a bearish divergence in 1 and 4 hour charts. Also remember that the FED has accepted the H&S validity...


Diego
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theroller
Feb 22, 2007 2:23am
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Basically, how I see all these signs:

1) Yes, EU trying to take EUR and GBP lower.
2) Yes, USD has an edge (5.25 vs 3.5)
3) BUT, EU and GBP is destined to hike rates more rapidly than US
4) Remember, 5.25 vs 3.5 is ALREDY in prices
5) Markets move according to FUTURE assessments/expectations
6) Interest in USD is decreasing.
7) TIC was a shocker
8) A wave of Commodity craziness is set to come; and it often initially causes sharp USD selloff.
9) USD might even make a new low during spring, similar move to last year's.
10) EUR/USD found a huge base around 1.29/1.30
11) GBP/USD found a huge base around 1.92/1.93
12) Hence, USD selloff odds are higher



Quoting Aspen Trading Group
Fundamentals are important, however, in the next few weeks/months I cannot see the Eurozone coming up with better fundamentals. What is it you see that suggests Euro fundamentals are better than US currently?

More importantly USD has a higher yield than does EUR - given that this market is being driven by interest rates right now, the USD holds an edge in that category relative to EUR.

That is what makes it a market - just my 2 cents/euros

Dave
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theroller
Feb 22, 2007 9:42am
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An extra eddition to the graph.

What happens if a Shoulder-Head-Shoulder appear in a BULL market?

Well, a massive break to the upside.

I suspect the setup will present itself as an upside breakout, contrary to downside. (If the market had been BEAR, 100% agreed that this setup would have been a downside breakout)

Below are some points that was pointed out on another thread:

Here is the broader look:

USD Index is currently hovering around 84.5, which is key. Actually, the direction for the USD is set for the upcoming days. USD is being sold for the last 4-5 years, continuously. There has been some consolidation buy-backs in the mean time, such as late 2004 to late 2005, where EUR/USD plunged from 1.36 to 1.16. Broader picture is, USD is sold.


USD is up for another decision time, whether a consolidation will occur, taking EUR/USD down to 1.20s, Gold to 610/630s, Oil down to 40s, etc, or another wave of USD selloff. Looking at all these markets, expectations, USD is on the verge of another decline. USD simply doesn't have any backups currently (Shocker TIC, intermittent "expected" rate hikes vs EU & BoE's rapid hikes, interest in commodities and agriculture), and alot of gangs are lined up right outside the door. USD Index is set to go BELOW the former lows, around 82, Gold set to surge to 730+, Oil to 60+.
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Aspen Trading
Feb 23, 2007 6:23am
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Quoting theroller
An extra eddition to the graph.

What happens if a Shoulder-Head-Shoulder appear in a BULL market?

Well, a massive break to the upside.

I suspect the setup will present itself as an upside breakout, contrary to downside. (If the market had been BEAR, 100% agreed that this setup would have been a downside breakout)

Below are some points that was pointed out on another thread:

Here is the broader look:

USD Index is currently hovering around 84.5, which is key. Actually, the direction for the USD is set for the upcoming days. USD is being sold for the last 4-5 years, continuously. There has been some consolidation buy-backs in the mean time, such as late 2004 to late 2005, where EUR/USD plunged from 1.36 to 1.16. Broader picture is, USD is sold.


USD is up for another decision time, whether a consolidation will occur, taking EUR/USD down to 1.20s, Gold to 610/630s, Oil down to 40s, etc, or another wave of USD selloff. Looking at all these markets, expectations, USD is on the verge of another decline. USD simply doesn't have any backups currently (Shocker TIC, intermittent "expected" rate hikes vs EU & BoE's rapid hikes, interest in commodities and agriculture), and alot of gangs are lined up right outside the door. USD Index is set to go BELOW the former lows, around 82, Gold set to surge to 730+, Oil to 60+.
My analysis was for a trade that may last for a few hours/days - as you will note the chart I used was a 60-min chart, hence , not looking to make any long-term forecasts.

Dave
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theroller
Apr 17, 2007 5:40am
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Quoting theroller
Basically, how I see all these signs:

1) Yes, EU trying to take EUR and GBP lower.
2) Yes, USD has an edge (5.25 vs 3.5)
3) BUT, EU and GBP is destined to hike rates more rapidly than US
4) Remember, 5.25 vs 3.5 is ALREDY in prices
5) Markets move according to FUTURE assessments/expectations
6) Interest in USD is decreasing.
7) TIC was a shocker
8) A wave of Commodity craziness is set to come; and it often initially causes sharp USD selloff.
9) USD might even make a new low during spring, similar move to last year's.
10) EUR/USD found a huge base around 1.29/1.30
11) GBP/USD found a huge base around 1.92/1.93
12) Hence, USD selloff odds are higher
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