EUR/USD: Doubt is resolved; downtrend to continue

Stuck at Support Line A for the last while, there was doubt as to whether the Euro would continue to fall against the US Dollar, as market pressures would suggest, or whether the chart would bounce off Line A. Yesterday's downswing brought the chart clearly through Support Line A. The doubt is over. The Euro will continue its dive (with occasional pausses) until it reaches Support Line B, at around $1.12.

EUR/USD: cautious expectation that downtrend will continue

Click chart to enlarge.

At the top of an upswing, the chart indicates the Euro today swinging down against the US Dollar.

Some easing of the rate of the downtrend is seen in the recent oscillations, shaded on the chart.

The security is now in a strong Long-term Support Zone, but economic pressure surely continues to strengthen the Dollar against all comers.

Today's FOMC meeting can hardly stop the trend. We wait to see how low the present Downswing will go: will its bottom indicate a strengthening of the downswing, or further evidence of a parabola bottom forming?

EUR/USD converging parabolas

Click to enlarge image.

Joining the graph bottoms gives a neat parabolic shape, indicating that the Euro downtrend against the US Dollar is gradually coming to an end. This idea will be strengthened if the coming week's downswing bounces off the parabola.

Joining the tops gives another parabolic shape, but not entirely parallel with the Supporting parabola. In fact, the two parabolas are converging. Obviously, either the Resistance Line (the top parabola) or the Support Line (the bottoms parabola), must be breached in the coming weeks.

I expect the downtrend to continue for a few more months due to the downward pressures on the Euro against the Dollar. My confidence in this prediction will be boosted if the Supporting parabola is breached.

Euro Plunge Moderating?

Yesterday's rise in the Euro against the US Dollar forces us to have another look at our prediction that the EUR/USD would continue its plunge for several more months. The last downswing ended prematurely and yesterday's upswing broke through the One-year Resistance Line.

Joining the recent tops and bottoms indicates that the downtrend slope may be moderating, and perhaps a parabola bottom forming. Nevertheless, the Euro is to continue its ZIRP and QE, which the Dollar is forsaking..The EUR/USD will, of course, now swing down again, but it remains to be seen if it will break through the new Support Line and continue its plunge as far as the One-year Support Line.

Dow: watching for the Big Dip

DIA (Dow Industrials ETF) fell strongly over the last two days. My chart shows a Resistance Line and Support Zone based on performance for one year. The price fell only to the top of the Resistance Zone today. If this is just a downswing and not the commencement of the expected Big Dip, then the graph will bounce back from either the top or the bottom of the Support Zone. We watch to see what will happen next.

EUR/USD next stop $1.226 or $1.20

As the Euro drops back from its Spike of last Thursday and resumes its plunge, the next stop, I guess will be at $1.226, but this will be only a temporary holdup on its way to $1.20.

Euro's bounce in response to Draghi's speech today is a mini spike

Today's bounce in the Euro, in immediate response to Draghi's speech, is, in my view, just a mini spike, caused by Bulls waiting for an excuse to buy. The graph has turned down at this minute in time, and will continue downwards.