EUR/USD closed Friday 1.1246 while the reported Bottom for Friday was 1.1245 and 1.1273. Wednesday, Thursday and Friday last week offerred ” The False Bottom” at 1.1301.
False Bottoms as is my own term is a price concept not seen very often. The RBA to lower AUD in light of RBA Statements and Big Glenn Stevens speeches attempted to employ the “False Bottom” concept but always failed. The RBNZ and NZD was always a bit more successful, not often.
Its a question of timing as central banks never ask themselves or know if their currency pair is overbought or oversold, where can we drive prices to and at what bottom price. Central banks don’t evaluate such concepts to be honest. My models are the central bank models but refactored to address concepts of overbought, oversold and much more.
Central banks view currency prices in a larger picture so abstract, it leaves concepts of reality. Alred North Whitehead in 1924 stated it best as ” Fallacy of Misplaced Concreteness”. Abstract thoughts, beliefs and concepts become misplaced as reality.
The motivation by central banks in “False Bottoms” is to force down the price of a currency pair. The “False Bottom” concept is rarely seen by the ECB so quite interesting. More interesting is to take the playbook from the RBA because the RBA perfected False Bottoms. Again, big changes coming to ECB July 1 and long term speculation is the ECB will turn Euro into AUD and slow EUR speed and cut overall ranges.
EUR/USD Bottom. 1.1203. Normalized again. Target achieves by breaks 1.1231, 1.1217, 1.1203 Bottom.
Upper Targets 1.1309, 1.1288 and Failure Point at 1.1267.
Vital points above 1.1457, 1.1390, 1.1354, 1.1323, 1.1270 to 1.1278, don’t touch this area.
Vital points below 1.1207, 1.1157, 1.1144, 1.1069, Monthly average 1.`1090. Note Bottom 1.1203 V 1.1207.
Good points to reload longs for the day because EUR/USD price remains dead flat on the floor for very short term.
Brian Twomey, Inside the Currency Market, btwomey.com