Bearish Signal & Targets | $EUR $JPY ##ECB #BOJ #Forex $USD
Friends,
This pair is quite difficult to grasp from a fundamental perspective, as both $EUR and $JPY are expected to under-perform. Yet, there could potentially be a trade opp here, using my prop predictive/forecasting model
FUNDAMENTAL DATA:
First, $EUR's recent negative deposit rate combined with ECB's option of turning to large-scale asset purchases are two fundamental drives that would guarantee bears dominance in the medium and long range.
Second, $JPY is expected to remain under pressure, as #BoJ's QE remains the dominant feature. Japanese investors would probably add further bearish pressure on the #Yen as they consider better returns from foreign bonds. Institutional consensus is thus bearish, with an expectation that $USDJPY might possibly reach $110.00 by the end of Q4 2014.
Considering both fundamental bearish outlooks, one has to turn to other discreet tool to decipher any potential trade opportunity. This is when my prop predictive/forecasting model comes handy.
TECHNICAL DATA:
Before I define the bearish targets which have been issued by the predictive/forecasting mode, I must define what upside risk exists based on the recent price action.
Looking at recent price action, several R/S levels are worth defining - Here is a preliminary chart I am consulting to define these level:
$EURJPY - 4-Hour:
-
A quick correction first and an explication:
1 - The bullish pattern defined is a Shark. A correction is in order here, as the Shark starts its point enumeration at "zero', then completes its pattern at Point-C. This is so, because it often acts as the "gate-keeper" to the 5-0 pattern, which is defined and completes at the 50 percent (hence 5-0) point of the Shark's last defining impulse leg (i.e.: the B-C leg, completing the Shark pattern at Point-C) - For added information on this pattern, I would consult Mr. Scott Carney's book and site: Harmonic Trading, where the pattern are well defined therein.
The first trading range defined above the 50% level is defined by the predictive model that sees a significant resistance/reversal potential there. So, I have chosen that zone as a probable entry level in consideration of a short position.
The second, higher range defines what I had defined before as the EAGLE (i.e.: (E)xtremely (AG)gressive (L)evel of (E), which is a prior strategy for counter-trend entries). It would define a last ditch consideration for a short, affording a much lower, much preferable risk/reward ratio.
PREDICTIVE/FORECASTING MODEL:
The prop model has thus defined the following bearish targets, as it signaled already a bearish market reversal confirmation:
1 - TG-1 = 135.232 - 17 JUN 2014, moderate probability
2 - TG-2 = 129.950 - 17 JUN 2014, moderate probability
and
3 - TG-Lo = 124.537 - 17 JUN 2014, low probability
The probability qualifiers are in reference to price's ability to ever reach these levels. As mentioned in prior analyses, a TG-Lo/TG-Hi are typically referencing extreme targets of low-probility, but if and once price ever reached these levels, they tend to act as reversal-low and reversal-top levels, respectively
OVERALL:
The fundamental analyses are not supportive of any distinct directional clues. However, the model did signal a bearish market reversal. Given the possibility of reactive upside, I caution the trader to look for overhead exposures. The ones I have defined are based on personal research. So, "do the due" diligence.
Cheers,
David Alcindor
Predictive Analysis & Forecasting
----------------------
Twitter: @4xForecaster, if you'd like to follow future analyses and forecasts in Forex, metals, indices and bitcoin
----------------------
This pair is quite difficult to grasp from a fundamental perspective, as both $EUR and $JPY are expected to under-perform. Yet, there could potentially be a trade opp here, using my prop predictive/forecasting model
FUNDAMENTAL DATA:
First, $EUR's recent negative deposit rate combined with ECB's option of turning to large-scale asset purchases are two fundamental drives that would guarantee bears dominance in the medium and long range.
Second, $JPY is expected to remain under pressure, as #BoJ's QE remains the dominant feature. Japanese investors would probably add further bearish pressure on the #Yen as they consider better returns from foreign bonds. Institutional consensus is thus bearish, with an expectation that $USDJPY might possibly reach $110.00 by the end of Q4 2014.
Considering both fundamental bearish outlooks, one has to turn to other discreet tool to decipher any potential trade opportunity. This is when my prop predictive/forecasting model comes handy.
TECHNICAL DATA:
Before I define the bearish targets which have been issued by the predictive/forecasting mode, I must define what upside risk exists based on the recent price action.
Looking at recent price action, several R/S levels are worth defining - Here is a preliminary chart I am consulting to define these level:
$EURJPY - 4-Hour:
-
A quick correction first and an explication:
1 - The bullish pattern defined is a Shark. A correction is in order here, as the Shark starts its point enumeration at "zero', then completes its pattern at Point-C. This is so, because it often acts as the "gate-keeper" to the 5-0 pattern, which is defined and completes at the 50 percent (hence 5-0) point of the Shark's last defining impulse leg (i.e.: the B-C leg, completing the Shark pattern at Point-C) - For added information on this pattern, I would consult Mr. Scott Carney's book and site: Harmonic Trading, where the pattern are well defined therein.
The first trading range defined above the 50% level is defined by the predictive model that sees a significant resistance/reversal potential there. So, I have chosen that zone as a probable entry level in consideration of a short position.
The second, higher range defines what I had defined before as the EAGLE (i.e.: (E)xtremely (AG)gressive (L)evel of (E), which is a prior strategy for counter-trend entries). It would define a last ditch consideration for a short, affording a much lower, much preferable risk/reward ratio.
PREDICTIVE/FORECASTING MODEL:
The prop model has thus defined the following bearish targets, as it signaled already a bearish market reversal confirmation:
1 - TG-1 = 135.232 - 17 JUN 2014, moderate probability
2 - TG-2 = 129.950 - 17 JUN 2014, moderate probability
and
3 - TG-Lo = 124.537 - 17 JUN 2014, low probability
The probability qualifiers are in reference to price's ability to ever reach these levels. As mentioned in prior analyses, a TG-Lo/TG-Hi are typically referencing extreme targets of low-probility, but if and once price ever reached these levels, they tend to act as reversal-low and reversal-top levels, respectively
OVERALL:
The fundamental analyses are not supportive of any distinct directional clues. However, the model did signal a bearish market reversal. Given the possibility of reactive upside, I caution the trader to look for overhead exposures. The ones I have defined are based on personal research. So, "do the due" diligence.
Cheers,
David Alcindor
Predictive Analysis & Forecasting
----------------------
Twitter: @4xForecaster, if you'd like to follow future analyses and forecasts in Forex, metals, indices and bitcoin
----------------------