Hi John, longer term, yes that could well be the ultimate and longer range target, but more near term, the Euro and dollar charts are telling me something very different for now... the past five weeks on the chart is a highly sophisticated pattern which does not develop often, in fact it's very rare, it take a full five weeks to form and complete... this pattern illustrates an extremely high level of market and trader confusion about future trend... when this kind of pattern occurs, only one side will win out, e.g., the longs or the shorts, and the battle for their position is fierce... and from the look if this pattern right now, it looks like the Euro bulls are winning heavily, this means the Euro is going to stage a more significant rally, the complete reverse for the dollar, the dollar bears are winning big time, this means the dollar is going to decline... we still need Friday's close for a final confirmation, but it looks pretty promising right now...
This rare pattern, when complete, has a better than 85% success rate... this is good enough for me since anything better than 50/50 already tips the odds in my favor... I believe an 85% success rate when the pattern is confirmed is comparatively a very high rate and well worth taking when considering risk/reward returns...
Based on the near term five week pattern is why I heavily shorted the dollar yesterday, in anticipation of the dollar and Euro patterns reaching full completion by Friday, we have only today and tomorrow for this pattern to fall apart, but the odds of falling apart are not likely after building momentum for five full weeks...
If completed, then we should expect to see a more significant rally in the precious metals group all across the board... and which is why I took heavy long positions earlier this week and yesterday in that group...
I imagine after the coming move is over, then these currency markets may very well resume their trek towards that longer term target you wisely mention...
I can only be reminded that future projections and targets, while wonderful to propose and may also be highly accurate, I personally never pick targets, I prefer to follow these markets and not tell them what they're supposed to do in the future, the chart patterns will always tell us tentative direction... Carl Swenlin says that all technical analysis is only a windsock and not a crystal ball... it only tells which way the wind is blowing right now, it doesn't predict the future...
GZ |
