As you can see the Euro has been in a long-term steady monthly trend channel decline since 2008. (Monthly EURUSD Trend: BEARISH)
EURUSD Weekly Chart
The weekly chart below shows how the overall longer-term Monthly trend channel clearly illustrates that you can play the counter-trend (bullish) weekly rallies, but the momentum but you are fighting overall is the prior bearish monthly momentum since 2008. In fact, pricing closer to the upper end of the trend channel which is on a downward trend. (Weekly EURUSD Trend: BEARISH)
EURUSD Daily Chart
As you see the Euro has managed short-term recovery against the US Dollar after finding support at the 1.13 figure, but the move higher may will out of steam. The Euro was the top performing currency last week, gaining ground alongside global equity markets as risk appetite broadly rebounded. (Daily EURUSD Trend: CounterTrendBull)
Ultimately, the Euro has bounced back a bit, but as with any investment there will be volatility, so this was expected because of all the media targeting Trump right now so if we see the Euro finished the month above 114.27, then we can see the dollar pause into October with all the anti-Trump initiative taking place.
Once again the charts continue to prove that the Monthly overall trend overrides the weekly and daily below and our daily signals support the bearish stand.
So, for those of you who like a bullish EURO, a rally into October would most likely be followed by a solid and sharp decline, back into trend, thereafter into 2020.
As clearly illustrated, the Eurozone is clearly in a longer term currency decline and investors on the watch for a bear market in equities should keep their eyes on Europe.
“This animal is the sneaky sort and victims rarely see it coming,” said Charles Gave, founder of the Hong-Kong based asset-allocation consultancy, in a note to clients Wednesday. “If a bear market is to unfold, this will probably start outside of the U.S.” The likely starting location would be the eurozone, Gave said, where the single currency system “has now been destroying southern European economies for 20 years and local populations are increasingly unwilling to take the beating.” Gavekal Research
It will likely then spread to Australia, New Zealand, and the East.
InterAnalyst has been serving investors globally since 1990. Authoring hundreds financial articles and publications, thousands of trading charts to investors worldwide.