Discussion in 'Forex' started by drsteph, Oct 21, 2006.

  1. Sorry, couldn't quickly find a recent thread on this.

    I think I said a few months ago that the cross seemed to be driving the market in USD for the two majors. Still think that way.

    Got a chance to reexamine my charts and will post here.

    Take a look at EUR/JPY which is definately trading in a rectangle from 148-150.50 since its massive run up this year from 140.

    Here's the daily:
  2. And here is the weekly. Look at that run up after breaking out of that long term triangle.
  3. So then, look at USD/JPY. While we all know the yen pretty much does what it wants, you can't disagree that at least at present, it is in a pretty well established uptrend since May.
  4. OK, we're getting there.

    Now look at EUR/USD.

    Here's the daily:
  5. And here is the weekly:
  6. OK. Sorry, but trying to make a point here.

    If we presume that EUR/JPY remains rangebound for the foreseeable future, perhaps with a midpoint price of 149.25, and USD/JPY continues its uptrend (target price of 120), the reciprocal EUR/USD price is targeted at 1.2437.

    If the Yen trend is persistent, and we see USD/JPY of, say, 124, the reciprocal EUR/USD price is 1.20!

    Even if we take the upper limit of the band (150.50) with a more reasonable 122, EUR/USD still calculates out at 1.2330. This is probably sufficient to break the weak support level at 1.2450 and confirm a resumption of the EUR/USD downtrend that was interrupted by the classic head and shoulders that developed over the last two years.

    Interesting, isn't it?

    Comments and opinions welcome.
  7. Nobody here trades the cross?
  8. arco


    Hello drsteph

    Yes, I trade Eur.Yen and have spoken about it extensively from a charting perspective on other forums .

    Currently the longer term action is forming a Symm Triangle as shown on the weekly Ichi chart. Kumo has proved suppportive so far, and MacD is holding above the centre line.

    Shorter term we have just hit the early targets from a bullish Gartley which has been good for circa 150 pips.

    Always interested in your thoughts

    regards - arco
  9. I trade the cross as well as every other cross....I have been short for 2 months now from 149.70. Been adding on rallies over 150. Looking for 142 eventually. What are your long term targets?
  10. arco


    Hello Fred

    I think long term its hard to predict right now.

    If I was personally trading this for the longer term I would be waiting for a long term indicator to give me a good strong signal.

    Ichimoku weekly is still technically bullish, and the Symmetrical Triangle whilst neutral could still turn out to be a continuation pattern and break north. The Kumo is thick and appears supportive.

    Short term trading with this cross should remain more fruitful for the time being IMVHO

    regards - arco
    #10     Oct 25, 2006