Monday, June 27, 2016

EurUsd: Did "BREXIT'' Just Confirm The Trend?

From 2000 to 2008, the European market enjoyed a great growth and the Euro rose to its highest price in almost 50 years (not certain) and about 90-95% growth between the two years (2000 and 2008).

Within this period, 8 years,the Euro rallied from 0.82 to 1.6038 before being hit by the world's economic recession.

It should also be noted that a bullish impulse wave was completed and a reversal was expected.

According to Wychoff, every effect in any market has a preceding corresponding cause.
At the early stages of the recession, Euro dipped from 1.6038 to 1.228 (-37%) in just 4 months

The recessionary effect continued amidst two recoveries before the Euro finally fell to 1.044 in March 2015.

From March 2015 to March 2016 ( about a year), price was in a consolidating mode (Wave 4 of C) and Euro could further dip to the price from which it started  at the beginning of this millennium.

The "BREXIT'' referendum result may have confirmed or supported the continuous bearish bias of the Euro as  more woe could befall the EU if some other member countries decide to leave.

It's not hidden that Sweden and the Britain are allies when it comes to E.U politics. They have agreed together on several occasions. Swedes may also request for their own referendum. ''SWEXIT?''.

Denmark, France, the Netherlands, Hungary are also reported to perhaps have their referendum.

What about the Greece debt crisis?
The EU may decide to end their membership status, which has been a big debate among member countries, in order to force cohesion among remaining members.

Withe all these possibilities (EU losing more members), Euro may not seem to recover anytime soon.

Technically, since the recession started in 2008, March-April of every year has been a major technical swing time zone.
March-April of 2008-2015 have been major turning points.

We saw major dips in March 2008, 2010, 2011, 2012, 2014 and rallies in March 2009, 2014 and 2015 according to the chart below.

Since March-April 2016, Euro has continued the same pattern. Price may continue in the south amidst tough times ahead for the EU.

In March-April, 2016, Euro completed a flat pattern which marked the probable end of Wave 4 of C

In the coming 8-11 months, Euro will likely decline further to complete Wave 5 of C in a journey toward 0..82 though 1.00 is a psychology level to watch out for.

This, if happens,will be the lowest price of the Euro since 2008.

Markets have repetitive nature no matter what the causes are.

The next 1 year is expected to be in the Downside for the Euro and the '''BREXIT'' may have been an early propellant.

See you in March 2017 .

Let me know your thought by your comments or mail me @

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