TheÂ June Eurocurrency posted pivot highs of the April 15 and May 3rd reversal swing dates. Both dates marked the end of the corrective bounce and triggered a bearish reversal, followed by a lower market. The euro also posted a 570 point rally, during the two session following the May 6th reversal date. Since then, the euro has dropped to a new low and reached the up-sloping reaction line target objective,on the May 19thÂ reversal date. The marketÂ has completed a full cycle, with time and price coming together on May 19th. The euro rebounded off the reaction line suggesting the downward pressure may be over soon and could set up a possible bullish reversal pattern. For undated trade signals check out theÂ TMV Swing Trade report.
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The Canadian dollar formed a bearish TR swing pattern after posting a major high on the April 22nd reversal date andÂ turned lower in front of the May 6th meltdown and subsequent drop to 9293. The â€œloonieâ€ rebounded from the low and traded higher into the May 12th reversal swing date, closed inside the 60% sell window and tested the 20- day SMA. This price action formed a potential bearish TC pattern with trigger price below the price bar that entered the 60% sell window and triggered the sell when the market passed through .9717.Â Â This is just one example of the potential provided by understanding â€œaction-reactionâ€ price action in conjunction with the reversal date trading technique. Â UsingÂ the â€œaction-reactionâ€ time/price projection methodologyÂ I was able toÂ identifyÂ a majorÂ reversalÂ timing on April 22, followed by the high of the corrective rebound on May 12â€¦days in advance.
Tuesdayâ€™s one-day rally stopped shortÂ by the 20- day SMA and the down-sloping reaction line.Â TheÂ yen reversed at the two levles of resistanceÂ and resumed the dominate downward trend. This should set the stage for the next swing lower into the May 6th reversal swing date.
Canadaâ€™s dollar once again approached parity with its U.S. Dollar after Finance Minister Jim Flaherty said the currencyâ€™s rise has been â€œorderlyâ€ and reflects the countryâ€™s good fiscal position. This has effectively ended the three-day pullback to the median line and set up a new bullish reaction swing pattern. I look for the market to continue higher into the April 15th reversal swing date.
June Swiss franc â€“ The Swiss franc is beginning to exhibit a show of strength on speculation that the central bank will begin relaxing a year-old policy of selling the currency to curb its strength. The market has formed a bullish reaction swing with a retest of the 20-day SMA on Monday. This is a potentially bullish â€œsetupâ€ with a trigger price at .9527. A confirmation of this reaction swing could also mark the end of the longer-term A-B-C continuation pattern and the beginning of a new bullish leg. Check the latest issue of the Traders Market Views Swing Trading report for current recommendations.
The Dollar index began to show weakness when it moved away from the ascending median line. However, it was not until the Dollar reached the sloping reaction line target objective on the February 23rd reversal date that the bullish cycle was complete.Â A retest of the reaction line on Wednesday failed and the market turned lower. I look for the trend to shiftÂ over the next few days and formÂ a possible TR swing pattern and selling opportunity.
In the last issue of the Traders Market ViewsÂ (February 19, 2010) I talked about the triple top formation that had formed inÂ the dollar indiexÂ over the past several days. The pattern formed at the end of the cycle, but Â just below the reaction line target objective. I said the market should tade above the triple top and challenge the reaction lineÂ before the reversal timing could kick in. The dollar did reach a new high of 81.43 during Fridayâ€™s session and tested the reaction line objective before turning lower. The market hit the reaction line on the weak side of the ascending median line suggestiongÂ a loss of momentum at the end of the trend.Â I look for the dollar to begin froming a new TR pattern leading to a shift in the trend over the next few days. I will have an update in the next issue of the Traders Market Views.
The March Japanese yen has just completed a 5-wave continuation pattern, inside the longer-term downward trend. This type of pattern in a mid-trend pattern andÂ suggestsÂ downward trendÂ should continueÂ over the long-term, but right now I want to talk about the 5-wave pattern just completed.
The upward swing began on December 31, after a failed swing pattern formed a new A-B pattern. The Yen rallied off this low and formed a (C) to (D) reaction swing between 1/15 and 1/20, justÂ above the 20- day SMA. This swing pattern was the balancing point of the upward swing (where the action segment ends and the reaction segment begins) and could have been used to pinpoint the time and price of the subsequent price move.Â This was done with reverse count from 1/15 to the beginning of the cycle (marked as A). The countÂ equaled 11 days. That number was used to make the forward projection of time and price byÂ projecingÂ forward 11 daysÂ from 1/20Â (marked as D).Â February 24th was the projected reversal date and the end of the cycle with a initial target objective at the sloping reaction line.
As the February 24th reversal date approached it look dim for theÂ Â time/price projection as the market drifted lower intoÂ February 24th. On the reversal swing day, the market surged to a new high and peaked on the projected date. The short-term corrective swing wasÂ complete and the market turned lower, to resume the prevailing trend. TheÂ long-term bearish cycleÂ should continue into end of the cycleÂ projected forÂ mid March.Â Iâ€™ll have more on the longer-term downward trend, with time and price projections later.
The British pound broke support and triggered the sell suggested by the January 26th bearish reversal swing date. The market has now moved out of a A-B-C continuation pattern and resumed the longer-term downward trend. The next reversal swing date is projected for February 3 with a target objective at 1.5825. I will keep you updated of any changes in the TMV Swing Trade report.