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The charts, graphs and comments in my Trading Blog represent my technical analysis and observations of a variety of world markets...
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Saturday, October 01, 2011

How the EUR/USD ended the 3rd Quarter of 2011

Each candle on the chart below of the EUR/USD represents a one-month Option Expiry period...this candle will close on October 21. Price on the current candle sits on the apex of a rough diamond formation in between the 50 sma (red) and the 200 sma (pink). A continuation of the bearish momentum could send it down to, firstly, 1.3ish, and, subsequently, to a more major support of 1.2ish (200 sma)...these levels are depicted more clearly on the next 2 charts.


Each candle on the next chart represents one yearly Quarter. The current Quarter closed decisively as a bearish engulfing candle and is the third bearish candle since the 3rd Quarter in 2008 (on the last 3 attempted rallies since the beginning of 2007)...this tells me there is no solid case on which to base a bullish argument for this currency pair and hasn't been since the 3rd Quarter of 1990 as price is back to that level, once again.


Each candle on the last chart represents one year. Price on the current candle is retesting last year's close and is currently in a descending triangle formation. Last year's long bottom tail has not been retested and lies in the vicinity of the 1.2 major support level. Should that level be breached on extreme weakness, I see the  next major support levels below that at 1.15 and 1.05.


***From my weekend analysis of Quarterly and Yearly charts of various instruments, it would appear that the markets are in for a rough ride for the next several years. I'll be keeping an eye on the VIX for additional clues in the months ahead...something I wrote about on September 12th of this year: http://strawberryblondesmarketsummary.blogspot.com/2011/09/money-is-always-interesting-subject.html