Trading opportunities for the currency pair: Movement on the EUR/USD pair continues to correlate with that of 2005. According to historical patterns, a large downwards correction is due to take place after the 15th of April. Despite this, the rate may still deviate significantly upwards.
After Friday’s payrolls, the price came out of the 1.0494 – 1.0626 range. As it breaks 1.0715, growth will accelerate to 1.0780. This is where the euro will stop growing and a symmetrical triangle will form. If a rebound doesn’t follow from this, and the rate breaks the 1.0829 support, we could see the price restore all the way to 1.1021. Should the daily candlestick close below the 2 copy line, then we can forget about this potential surge. We’re working towards 1.1021 with an eye on the 1 copy and 2 copy lines. The euro should reach the TR1 trend line by the 10th of April.
Background:
The previous idea for the EUR/USD currency pair was published on the 19th of December 2016. At the time of publication, the pair was trading at 1.0451. In my review, I proposed various possible scenarios for the pair’s development based on historical patterns. My model was based on the price pattern from 2005, which had a 90% correlation with price movements at the time. Back then, I was expecting a rebound from the lower boundary of the A channel to 1.0672 by the end of the year.
What actually happened is that the euro rebounded from the lower boundary of the A-A channel on the 20th of December 2016. On the 30th of December, the euro restored to 1.0654. Due to a slide from 1.0451 to 1.0352, the euro missed its target by 18 pips. The first few days of the new year were very volatile. In the space of two days, buyers receded by 314 pips. Despite this, on the 2nd of February, the price restored to 1.0828.
Current situation:
From a maximum of 1.0828, the euro fell back to 1.0453. The correction came to 61.8% of the upwards movement from 1.0340 to 1.0828. From the 22nd of February, the pair got stuck in a sideways trend for 10 days. The price came out of this trend on Friday as the US jobs report was published.
