Over the past month and a half the Euro has depreciated against the USD by over 9%. The Euro's steep decline provides opportunity get long of Euro under the 1.30's with a stoploss @ or below 1.29. The metrics I follow strongly indicate a EUR/USD rally back above 1.35, possibly 1.38's in extension.
The Euro's change in trend is signalled through a confluence in both Time and Price. The metrics are aligning very similar to what we have previously seen occur on my No.11 Sugar posts.
The four points of interest are labeled A, B, C, and D. (Month/Day/Year)
A= 10/26/2011 & 1.424
B= 12/01/2011 & 1.3545
C= 12/15/2011 & 1.3017
D= 12/15/2011 & 1.2942
The Time and Price measures of C and D are derived from the time and price occurrences of A and B.
The Date of C is 22.5 Degrees down from the Date of A
The Date of D is 5.625 Degrees down from the Date of B.
The Price of C is 5.625 Degrees down from the Price of A.
The Price of D is 2.812 Degrees down from the Price of B.
In mathematical terms, C & D are the quadratic functions of the 2.812 degree polynomials listed as A & B. As I mentioned, the EUR/USD is aligning similar to what we have previously seen in No.11 Sugar. With Sugar we identified a confluence of supporting factors which led to over a 50% increase in the 2 months following the buy recommendation.
The support price of sugar was 11.25 degrees of importance. The supporting dates of sugar were both 22.5 degrees & 45 degrees of importance.
The price degree of similarity to EUR/USD occurs because 5.625^2 = 11.25 &
2.812 ^2 = 5.625. A comparison of Price and Time degrees indicates that a EUR/USD rally is not as likely to occur and if it did occur, would not be as robust as the strength which sugar displayed. The reward to risk parameters for this trade given an exit @ or above 1.38 is 5:1.
No comments:
Post a Comment