EUR/USD: The January Indicator

In EUR/USD 22 year history since 1999 to include 2021, EUR/USD dropped for January overall 14 months and 8 months were up. January 2019 was a question mark due to a Doji candle, The current Januray of 2021 appears to end with a red down candle.


From 2008, down months represent 8 times for January and 6 up months while 1999 to 2008 experienced 7 down months to 3 up months.


Overall since `1999, Down months last 1.75 months to 0.57 up months.


Traditional January represents a seasonal cycle as down months occur from January to May then begins the uptrend from May to December.

To accurately determine the exact pip change to tops and bottoms, below is a re creation of a larger study from 2013 and done in 2019. Know the peaks and valleys then traders know not only the exact pip a down or up change will occur but the duration of the trade to its target.


EURUSD Trends/Turns: 2013 -2015 and 2018 -2019


Posted on June 30, 2019


To forecast tops and bottoms, below is the methodology and it was employed to accurately call the EUR/USD top at 1.3900’s.


This post is a re creation of the 2013 – 2015 view to Peaks and troughs, tops and bottoms for daily, weekly and monthly charts. The difference today is the view was assessed from 6/29/18 to 6/28/19 for a 1 year inspection.


The character of the EUR on any chart since inception hasn’t changed as EUR/USD is traditionally and invented to trade as a highly neutral currency pair and rarely falls outside of its neutrality. Any deviation to neutrality always corrects to assure EUR trades neutral.


Neutrality for EUR/USD means an equal number of up and down days, weeks and months match almost perfectly. New highs and lows never assumes an automatic continuation on its price path.

The question for traders must be how many peaks and valleys were involved in the price move to determine if a continuation or retrace will develop.


How many peaks and valleys may or may not mean the EUR trades within a few pips to its previous highs and lows. The EUR contains a distinct habit to bring this question to the brink.


The EUR/USD has radically changed from its 2013 -2015 trading days as 2013 -2015 afforded far wider ranges, trends and trade opportunities. The EUR/USD from 2018 to 2019 revealed daily and weekly trend / turns occurs much quicker due to depressed ranges and trends. Peaks and valleys were shortened by 1/2 in 2018 -2019 from its 2013 -2015 counterpart. Traders must be quick on the trigger to catch the move.

Daily 2013-2015 Vs 2018 -2019.


In 2013 -2015 for example, 71 down days total was recorded with 4 significant peaks. Down days turned every 17.75 days on average. A total of 74 up days saw 5 significant peaks with an average turn every 14.8 days.


If daily up days to down days are viewed, the EUR/USD trend/peaks turn every 16.1 days total.
In contrast, the 2018 -2019 EUR/USD daily up and down days are equally matched by 24 up days to 24 down days. The 3 daily Doji indecision chart candles appears for a reason.

2018 -2019


At 123 up days recorded 24 peaks for an up trend /turn every 5.12 weeks while 126 down days recorded 24 peaks for a trend /turn every 5.25 weeks. Up days Vs down days factored to a trend/turn every 5.18 days. Up to down days and trend/turn radically changed to shorter terms from its 2013 -2015 counterpart at 14 and 17 days by at least 3 times.


EUR/USD averages from 24 up days factors to 1.1500 and a 1.1489 Median. Interesting numbers as the current 5 year average is located at 1.1476. EUR/USD average for down days factors to 1.1312 and 1.1280 as a Median.


Weekly


2013 -2015 Vs 2018 -2019


From 2013 -2015, a significant up peak occurred every 4.5 weeks on average while a significant down peak occurred every 4.33 weeks on average. A significant weekly peak occurred for trend / turn in up vs down weeks every 4.4 weeks on average and fairly consistent with the 16.1 daily peak turn.


The 2013 -2015 Up data: Up weeks recorded: 4 weeks, 1 peak, 5 weeks, 1 peak, 5 weeks, 1 peak, 4 weeks, 1 peak. Notice the 5 / 4 relationship. A significant peak occurred every 4.5 weeks on average,


The 2013 -2015 down data: down weeks recorded: 8 weeks, 1 peak, 2 weeks, 1 peak, 3 weeks, 1 peak. A significant down peak occurred every 4.33 weeks on average.
2018 -2019.


For 2018 -2019, in 27 up weeks recorded 11 peaks or trend / turn every 6.75 weeks. Up week ranges lasted an extra 2.25 weeks Vs its 2013 -2015 period.


In 24 down weeks recorded 10 peaks for a trend turn every 2.4 weeks. A trend /turn in up v Down weeks occurs every 4.57 weeks. Up Vs down week ranges extended by a negligent 0.17 weeks. Overall up vs down week trends /turns shortened by 1/2 vs its 2013 -2015 counterparts. The answer is revealed by up trends at 6.75 vs Down weeks at 2.4. This deviation is rarely seen.


Weekly EUR/USD factors an up average at 1.1501 and down average at 1.1229.
Monthly.


Up months factors as 4 up months and 3 peaks for an up trend/turn every 1.33 months while 6 down months at 3 peaks equates to 2.0. Up Vs down trend /turns every 1.66 months.


Monthly 2000 – 2015


From the Oct 2000 bottom at 0.8206 to present July / August 2015 period.


Data


Monthly up months with a significant peak recorded, 3 months, 1 peak, 3 months, 1 peak, 16 months, 1 peak, 5 months, 1 peak, 8 months, 1 peak, 3 months, 1 peak, 29 months, 1 peak, 13 months, 1 peak, 12 months, 1 peak, 2 months, 1 peak, 6 months, 1 peak.


Overall 98 months Vs 11 peaks to include the EUR trend from 2003 to 2006 factors to 8.90 up months.


Monthly down months recorded: 5 months, 1 peak, 4 months, 1 peak, 3 months, 1 peak, 3 months, 1 peak, 6 months, 1 peak, 3 months, 1 peak, 6 months, 1 peak, 7 months, 1 peak, 8 months, 1 peak, 5 months, 1 peak.


50 months vs 10 peaks factors as a trend /turn every 5 months. Overall up vs down trend /Turn every 6.95 months.


Current EUR/USD


The EUR/USD topped at 1.1341 from 1.1183 in 5 days then bolted from 1.1183 to 1.1411 highs in 5 days. If the past is prologue then the EUR/USD contains 5 down days ahead.

Brian Twomey

EUR/USD, GBP, AUD and EM

Wide ranges between most significant averages in currency market prices and most of 28 currency pairs are affected.


Few examples.
AUD/USD 0.7821 vs 0.7498 or 323 Pips. The bottom average is rising, ranges are compressing by the day and a showdown is on the way. AUD either breaks 0.7821 and travels higher or breaks below the lower average to trade 0.7344 then 0.7308 and lower.
EUR/USD. 1.2119 1.2020 and 1.2038 Vs 1.2630. From 1,2119 and 1. 2630 or 511 pips. Main Average line at 1.2038 is rising to offer later support to 1.2119.


USD/CAD 1.2586 Vs 1.2924 and 1.2976 or 390 pips.


GBP/USD 1.3351 and 1.3360 Vs 1.3832. Main line at 1.3351 is rising. Showdown on the way.
GBP/JPY. Larger range 139.25 vs 144.31 and 146.14. Shorter range 139.25 Vs 142.90 or 365 pips. GBP/JPY is oddball pair as levels are failrly stable however bottom 139.25 is sloowly rising. GBP/USD will lead the way.


Currency prices are trading in wide ranges however the ranges are compressing and a big showdown is on the way for all 28 currencies but not anytime soon. This may take many months as main average lines are only rising by like 20 pips per day. Inside the ranges is wide open trading and good trades.


No different for EM. Ranges are extremely wide.


USD/PLN 3.8125 Vs 3.5409 or 2716 pips. Higher must break 3.7434 to target 3.7900’s easily.
USD/RON 4.1062 Vs 3.7777 or 3285 pips. USD/RON must break 4.0452 to target 4.1124. In the way is 4.1062. Ron currently trades 4.0085.


USD/MYR is USD/RON’s kissing cousin currency pair and ranges from 4.1630 3.7337 or 4293 pips. Extreme ranges for a dead mover currency. USD/MYR must break 4.0853 to mover higher. Currently trades deep oversold 4.0084. RON is clearly the better currency pair.


USD/HUF. Well supported at 284.98 from current highly neutral position at 296.08. Higher, USD/HUF must break 298.37 to target 300.35 easily.


USD/BRL Well supported at 3.8954 from current 5.2994. USD/BRL must break 5.3398 to travel higher to target 5.3736. USD/BRL at 5.2994 sits at fairly neutral. Longer to medium term, USD/BRL remains deeply overbought and heading much lower.

Watch Richter scale oversold EUR/GBP. Overall target 0.8996. Supported at the 5 year average at 0.8705. Today looking for 0.8936.

Watch USD/JPY 104,.32 big break for higher. This is a rising line so this break will take effort.

Brian Twomey