{"id":130733,"date":"2018-07-24T12:24:07","date_gmt":"2018-07-24T16:24:07","guid":{"rendered":"https:\/\/www.countingpips.com\/?p=130733"},"modified":"2018-07-24T12:24:07","modified_gmt":"2018-07-24T16:24:07","slug":"foreign-currencies-show-massive-volatility-rotation-setup","status":"publish","type":"post","link":"https:\/\/www.investmacro.com\/forex\/2018\/07\/foreign-currencies-show-massive-volatility-rotation-setup\/","title":{"rendered":"Foreign Currencies show Massive Volatility\/Rotation Setup"},"content":{"rendered":"
July 24, 2018<\/div>
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By TheTechnicalTraders.com<\/u><\/a><\/strong><\/p>\n

Our research team has been watching the foreign currency markets with great interest.\u00a0 Recently, the strength of the US Dollar has put extended pressures on many foreign currencies.\u00a0 The recent crash of the Chinese Yuan has alerted many traders to the concerns that China could be edging over the precipice in terms of debt and credit market collapse.<\/p>\n

As traders\/investors, we need to understand how these currencies move, and future moves may drive the global equity markets to new highs or lows.\u00a0 Let\u2019s take a brief look at how some of our proprietary indicators are set up on these Weekly charts.<\/p>\n

WEEKLY BRITISH POUND CHART<\/strong><\/h3>\n

This Weekly British Pound chart showing our proprietary Fibonacci Price Modeling system presents a very clear picture that the current trend is Bearish and that price is contracting.\u00a0 The Weekly Fibonacci price modeling system functions as an adaptive price modeling system \u2013 allowing the price rotations (peaks and valleys \u2013 highlighted by the yellow, cyan, magenta and white markers on the chart) to develop into a concise and efficient current model of price expectations and projections.\u00a0 The multiple price projection levels (the six projected lines to the right of the current price bar) show us where price may attempt to target should a breakout move happen.<\/p>\n

Notice that the current British Pound price has reached and stalled near the 1.3100 level \u2013 which is exactly where two of our Fibonacci price modeling system has predicted with the Red and Grey projection levels?\u00a0 Also, notice how the Blue and Cyan projected levels are aligning near 1.3775?\u00a0 This would be a proper expected price level should price find some support near the 1.3000 level and attempt a short recovery.<\/p>\n

As get further into these charts, please understand the key elements of these charts and what they are attempting to illustrate to all of us.\u00a0 With each pivot high or low, this price modeling system identifies a \u201ctrigger price level\u201d that is used to confirm a trend reversal (if it happens) as well as to identify key future support\/resistance.\u00a0 These are drawn as Green and Red horizontal lines.\u00a0 You\u2019ll notice a Green trigger price level near the current price bar \u2013 this is the \u201cupside price trigger level\u201d that would have to be breached if we were to see any further upside price advance.\u00a0 As long as price stays below this level, we should continue to expect a downside price move with a strong potential for new lows.<\/p>

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Summarizing this charts analysis, the current trend is Bearish.\u00a0 The current bullish trigger level is near 1.3600.\u00a0 Price is trending lower from a previous Bearish price trigger level near 1.4240.\u00a0 Price has reached the two (Red & Grey) projected price levels which means we should expect some price consolidation near these levels before establishing a new price trend (extending lower or rotating higher).\u00a0 Recent, new price bar lows show a very strong potential for further downside price activity.\u00a0 At this point, we see that support from a previous bottom, near 1.3060, will likely cause the price to stall near this level.\u00a0 We believe the price will continue to fall below the 1.3000 eventually as the strength of the US Dollar continues to push higher and the Brexit issues continue.\u00a0 The British Pound could fall well below 1.2500 before finding real support.\u00a0 Wait for this consolidation period to end and watch for lower prices to continue.<\/p>\n

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WEEKLY CANADIAN DOLLAR CHART<\/strong><\/h3>\n

This Weekly Canadian Dollar chart below shows a very interesting setup with our proprietary price modeling system.\u00a0 Notice the wide range between the trigger price levels (Green and Red) near the right edge of this chart?\u00a0 This extended range of the trigger price levels happens when the adaptive price modeling system finds price trend rotation.\u00a0 Previously, on this chart, we can see the trigger price levels were closer to price and within rotational ranges \u2013 the most recent breached trigger level being a Red (Bearish) trigger \u2013 indicating the start of a new bearish trend near February 5, 2018.<\/p>\n

At this point, should price fall below 0.7450, we should expect price to continue to drop towards 0.7250.\u00a0 Upside resistance should be near the Cyan projected price level \u2013 near 0.7850.\u00a0 Unless the Canadian Dollar finds support near 0.7500 and rotates higher to breach 0.81875 \u2013 this is nothing but extended price rotation.\u00a0 Typically, as price sets up an extended Top or Bottom, the trigger price levels will eventually tighten to establish a breakout trend setup.\u00a0 Right now, the extended ranges of these trigger levels is showing us that volatility and price rotation should be expected and the downward sloping Moving Average level will likely operate as a key resistance zone.\u00a0 The YELLOW markers at the bottom of the chart show us that price range is expanding and volatility is increasing.\u00a0 We could see some bigger swings in the Canadian Dollar over the next few weeks and months \u2013 but the trend is still bearish.<\/p>\n

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WEEKLY EURO CHART<\/strong><\/h3>\n

This Weekly Euro chart shows a more traditional price rotation setup with our Fibonacci price modeling system.\u00a0 Notice how the trigger price levels are very narrow and close to the current price.\u00a0 You\u2019ll also notice the Cyan price trend indicator, near the bottom of the chart, that is indicating that price range is contracting.\u00a0 The two price trigger levels (Red and Green) provide very clear breakout trigger levels (bullish near 1.1913 & bearish near 1.1687).\u00a0 The most recent trigger level to be breached was the Bearish level near 1.2200.\u00a0 A recent low price rotation has established a new low price pivot that is projecting much higher price projection points.\u00a0 Additionally, a more recent high price rotation has established new lower price projection points.<\/p>\n

This sideways price rotation will be broken and a new trend will be established in time.\u00a0 At this point, we know the 1.1913 level is the bullish trend trigger point and the 1.1687 level is the bearish trend trigger point. Price trend is still bearish and any lower price breakdown below 1.1576 would be a strong indication that price is breaking below current support and should attempt to move to near 1.1000.\u00a0 To summarize, the Euro appears to be under extended pressure and any price breakdown could be a great short for traders.<\/p>\n

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RUSSIAN RUBLE WEEKLY CHART<\/strong><\/h3>\n

Lastly, this Russian Ruble Weekly chart shows, again, price rotation and volatility.\u00a0 Notice how the bullish trigger price levels have been expanding throughout this sideways price rotation for the past year or longer?<\/p>\n

As we stated early, the adapting modeling component of our proprietary Fibonacci price modeling system identified this rotation as \u201cextended price congestion\u201d and attempts to identify broader market breakout levels as a means to confirm a true change in price trend.\u00a0 The most recent bearish trigger price level was breached on April 9, 2018.\u00a0 Price is trending lower\/bearish and the price trend indicator near the bottom is showing yellow \u2013 price volatility is expanding.\u00a0 We should expect further downside price moves with expanded volatility.\u00a0 Any price move below 0.01520 will indicate a very strong downside price move with the potential for price to reach 0.01250.<\/p>\n

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CONCLUDING THOUGHTS:<\/strong><\/h3>\n

Overall, we need to remember the recent political, economic and geopolitical conundrums are reflecting in expectations within global economies and currencies to be put under greater concerns.\u00a0 What was once a given, that the world would continue to operate without much disruption in the global balance of thing, is now open for debate.\u00a0 We are watching global concerns and liabilities as a result of China\u2019s recent downturn and currency devaluation reflect in additional concerns throughout the global currency markets.\u00a0 We have to be aware that these issues typically don\u2019t end quickly or without some form of government intervention.\u00a0 This means we may have quite a bit of time to play these moves and find good trades.<\/p>\n

Right now, the Russian Ruble, British Pound and the Canadian Dollar appear to be poised for a breakdown in prices in the immediate future \u2013 breaking through support and possibly dropping to recent historical lows.\u00a0 The Euro is setting up for a breakout\/breakdown move with a very narrow trigger price level range.\u00a0 The Euro may follow rally, briefly, if the US Dollar retraces a bit from current levels.\u00a0 Remember, these are weekly chart and help to understand the broader price trend.\u00a0 A breakdown in the Russian Ruble, British Pound and Canadian Dollar would likely coincide with a rally in the US Dollar and possibly the Euro.\u00a0 Therefore, watch for weakness in these markets and strength in the US Dollar as these moves happen.<\/p>\n

If you\u2019ve been follow our research recently, you already know why our members and followers stay dedicated to our team and our services.\u00a0 We have called nearly every move in the markets over the past 8 months perfectly.\u00a0 We urge you to visit\u00a0www.TheTechnicalTraders.com<\/u><\/strong><\/a>\u00a0to read some of our most recent research and to stay ahead of the markets by joining our membership services where we provide access to our most advanced predictive analysis tools and research.\u00a0 You owe it to yourself to have a dedicated team of professionals that can help you find success and stay ahead of the markets if you want to build greater success in your future.<\/p>\n

53 years experience in researching and trading makes analyzing the complex and ever-changing financial markets a natural process. We have a simple and highly effective way to provide our customers with the most convenient, accurate, and timely market forecasts available today. Our\u00a0stock and ETF trading alerts<\/a><\/u><\/strong>\u00a0are readily available through our exclusive membership service via email and SMS text. Our newsletter,\u00a0Technical Trading Mastery book<\/strong><\/a>, and\u00a03 Hour Trading Video Course<\/a><\/u><\/strong>\u00a0are designed for both traders and investors. Also, some of our strategies have been fully automated for the ultimate trading experience.<\/p>\n

Get our advanced research and market reporting, Daily market videos, detailed trading signals and join the hundreds of other traders that follow our research every day and profit.<\/p>\n

Chris Vermeulen<\/strong>
\nTheTechnicalTraders.com<\/u><\/a><\/strong>
\nTechnical Traders Ltd.<\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"

By TheTechnicalTraders.com Our research team has been watching the foreign currency markets with great interest.\u00a0 Recently, the strength of the US Dollar has put extended pressures on many foreign currencies.\u00a0 The recent crash of the Chinese Yuan has alerted many traders to the concerns that China could be edging over the precipice in terms of […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[],"tags":[],"class_list":["post-130733","post","type-post","status-publish","format-standard","hentry","no-post-thumbnail"],"_links":{"self":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts\/130733","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/comments?post=130733"}],"version-history":[{"count":1,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts\/130733\/revisions"}],"predecessor-version":[{"id":130734,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts\/130733\/revisions\/130734"}],"wp:attachment":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/media?parent=130733"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/categories?post=130733"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/tags?post=130733"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}