LONG TERM TRADE BREAKDOWN USING ONLY TECHNICALS...EURUSD EXAMPLE
Hey everyone! Hope you are all having an amazing weekend so far! I just wanted to come on here and make a post on a potential longer term outlook I have on the EURUSD currency pair using ONLY technical analysis and some confluence I am seeing technically on this pair. So let's dive in!
OK so to start we want to actually look back to the past. A lot of the time when we are looking to take a trade for a "future" move we have to look back at the "past" as well. Because you guys have probably heard the saying that "history repeats itself" and that is absolutely true when it comes to the financial markets and historical, significant levels of price.
Quick side note: PAST LEVELS OF PRICE ARE REALLY PSYCHOLOGICAL ZONES. WHAT DO I MEAN? Well if you look at price when it returns to previous areas of buying or selling; whether you call that demand/support or supply/resistance these levels are displaying to us that SOME BIGGER PLAYERS; or players in general; had a INTEREST to buy or sell at that zone whatever the reason may be. Which if you break that down means they have a MEMORY of that zone and MAY WANT THAT PRICE AGAIN in the future. If they still like the deal. THAT is why it is psychological. Okay moving on...
So when looking at this chart we can see back starting in October of 2022 we saw an upward move in the market happen that took prices from multi-decade lows around 0.9500-0.9700 area to highs around the 1.1300 price zone. This is a LARGE move in the markets and represents a macro move in the EUR vs the US DOLLAR.
We can see that back in August of 2024 (current year) that prices came up to test those 1.1300 highs that were formed in July of 2023 but ultimately FAILED to break higher leading to now months of downward movement and weakening of the EUR vs the US DOLLAR.
SO what to take away from all that? WELL on a macro level I am seeing that price wasn't ready to make new highs...so that means 1 of 2 things:
1. There wasn't enough buyers to break the previous highs
2. It wasn't the right deal for price for the bigger players to buy up enough to push it past those July of 2023 highs
SO what that is now leading me to believe based on the technical here and what they are displaying is that we can now see prices come back down to a weekly demand (psychological) zone that was formed back in June/July of 2022 when that original large move happened, and SEE IF THAT IS THE DEAL that buyers on a macro level want to send prices ultimately higher on a macro perspective...even higher than the July of 2023 highs.
Technically we can see that obviously there is a level of significant demand/support. We also have a fib alignment in that zone of the 78.6% retracement level (80% DISCOUNT!) ANDDDD we have a potential equal measured move aligning with multi-year supply up at the 1.17500-1.1800 price handle...oh and did I mention the -0.27% fib extension lines up with it also? Some nice CONFLUENCE with that as well
OKAY guys I know this was a long breakdown but this is a longer term perspective and wanted to appropriately break this analysis down for you guys so for all the longer term outlook traders/investors this is the level (if it comes back down to) to keep an eye on!
Hope you all enjoyed please boost this post and follow my page if you enjoyed this analysis and would like to see more accurate analysis and potential trade ideas. Cheers! Merry Christmas!
OK so to start we want to actually look back to the past. A lot of the time when we are looking to take a trade for a "future" move we have to look back at the "past" as well. Because you guys have probably heard the saying that "history repeats itself" and that is absolutely true when it comes to the financial markets and historical, significant levels of price.
Quick side note: PAST LEVELS OF PRICE ARE REALLY PSYCHOLOGICAL ZONES. WHAT DO I MEAN? Well if you look at price when it returns to previous areas of buying or selling; whether you call that demand/support or supply/resistance these levels are displaying to us that SOME BIGGER PLAYERS; or players in general; had a INTEREST to buy or sell at that zone whatever the reason may be. Which if you break that down means they have a MEMORY of that zone and MAY WANT THAT PRICE AGAIN in the future. If they still like the deal. THAT is why it is psychological. Okay moving on...
So when looking at this chart we can see back starting in October of 2022 we saw an upward move in the market happen that took prices from multi-decade lows around 0.9500-0.9700 area to highs around the 1.1300 price zone. This is a LARGE move in the markets and represents a macro move in the EUR vs the US DOLLAR.
We can see that back in August of 2024 (current year) that prices came up to test those 1.1300 highs that were formed in July of 2023 but ultimately FAILED to break higher leading to now months of downward movement and weakening of the EUR vs the US DOLLAR.
SO what to take away from all that? WELL on a macro level I am seeing that price wasn't ready to make new highs...so that means 1 of 2 things:
1. There wasn't enough buyers to break the previous highs
2. It wasn't the right deal for price for the bigger players to buy up enough to push it past those July of 2023 highs
SO what that is now leading me to believe based on the technical here and what they are displaying is that we can now see prices come back down to a weekly demand (psychological) zone that was formed back in June/July of 2022 when that original large move happened, and SEE IF THAT IS THE DEAL that buyers on a macro level want to send prices ultimately higher on a macro perspective...even higher than the July of 2023 highs.
Technically we can see that obviously there is a level of significant demand/support. We also have a fib alignment in that zone of the 78.6% retracement level (80% DISCOUNT!) ANDDDD we have a potential equal measured move aligning with multi-year supply up at the 1.17500-1.1800 price handle...oh and did I mention the -0.27% fib extension lines up with it also? Some nice CONFLUENCE with that as well
OKAY guys I know this was a long breakdown but this is a longer term perspective and wanted to appropriately break this analysis down for you guys so for all the longer term outlook traders/investors this is the level (if it comes back down to) to keep an eye on!
Hope you all enjoyed please boost this post and follow my page if you enjoyed this analysis and would like to see more accurate analysis and potential trade ideas. Cheers! Merry Christmas!
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