ADVANCED TECHNICAL ANALYSIS
EURUSD, MONTHLY
PURE PRICE ACTION ANALYSIS
The price is now at major support on monthly and weekly time frame as we had discussed in the previous article. This gives sharp bounces on the lower time times i.e daily and 4 hour.
Now lets get into the depth of the price action on the monthly chart and this includes;
- Analysis of the major swing moves and how long they have been lasting
- Analysis of the corrective moves and how long they have been lasting
- The current probable status
- General conclusion on the pair
Analysis of the major swing moves and how long they have been lasting
The major swing moves are indicated by the green arrows have been averagely lasting for about a year and moving over 3000 pips. As i had mentioned in the previous article, understanding of the price action of these major swings enables you not to get out of the trades too early or too late. It also enables you not to make entries into an ended/exhausted swing since you now know how long they averagely last
Analysis of corrective moves
The corrective moves have been lasting averagely 2 years, atleast twice the period of major swings. I have marked the corrective moves with ellipses. Observing how long these congestion zones last helps you not to enter the major swing trades too early or too late and the timeframes to trade on during different market phases
The current probable status
The price is now reacting to a strong monthly support marked S around 1.04674. This is the same zone that halted the major down ward momentum in the beginning of 2015 (pink arrow), and also held price in the beginning of 2016 (blue arrow) and is now holding price in the beginning of 2017 (black arrow). This makes this zone a large decisive zone for the next 12 months price movement.
The general trend is down and there is a remarkable bearish strength as price hit the zone this time around closing with a doji as compared to the engulfing pattern in 2015 and piercing pattern in 2016 <see the arrows>
The congestion period seems to be done as it has lasted averagely as the previous congestions so we are waiting for the reaction off this major S support zone, if it will give off a strong bouce up or continuation of down trend. Confirmation of continuation of the down trend will be marked by a close below the S zone. This may land price into the 0.91416 zone
General conclusion
Understanding pure price action helps you to know what phase the price is in apparently. Congestion on the larger times like this monthly chart give great swings on the weekly and daily charts just like how we have been trading this pair since 2015. Price is now at a major decisive zone for the next yearly action.
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