RJO FuturesCast

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While the weekly log scale chart above shows the yet-unbroken 1.16-handle that has capped this market as resistance for the past two years as a key resistant force, the extent and impulsiveness of this year’s rally and the past week’s break above the 1.1450-area on a weekly close-only basis below is more than sufficient to finally confirm our long-term base/reversal count introduced way back in 31-Jan’s Technical Blog.  This year’s strength confirms 03Jan17’s 1.0341 low as THE END of the secular bear market in the Euro and the new key risk parameter the bear has got to break to negate this very long-term count that calls for Euro gains that could span years.

Euro Index Weekly Chart

Euro Index Weekly Chart

As discussed often over the past five months, the Fibonacci fact that the resumed bear from May’14’s 1.3993 high was virtually identical in length (i.e. 1.000 progression) to 2008 – 2010’s initial 1.6040 – 1.1876 decline reinforced this major base/reversal count.  The monthly log scale chart below also shows key, multi-year former support from the 1.19/1.20-area that, since demolished in 2015/15’s meltdown, now serves as a key long-term resistance candidate.  A bearish divergence in momentum on a daily or weekly basis somewhere between spot and that 1.19-handle will likely stem this year’s rally and could expose a corrective (B- or 2nd-wave) setback that could be extensive in terms of both price and time.  But until such a momentum failure of a sufficient scale stems the clear and present uptrend, further and possibly accelerated gains should not surprise.

Euro Index Monthly Chart

Euro Index Daily Chart

On a more practical scale shown in the daily chart above and 240-min chart below, today’s resumed uptrend above last week’s 1.1490 high leaves 13-Jul’s 1.1370 low in its wake as the latest smaller-degree corrective low the market is expected to sustain gains above to maintain a more immediate bullish count.  In this regard 1.1370 becomes our new short-term risk parameter from which shorter-term traders can objectively rebase and manage the risk of a still-advised bullish policy.  Former upper-1.14-handle-area resistance is considered new near-term support.  A commensurately larger-degree momentum failure below 20-Jun’s 1.1118 larger-degree corrective low and key longer-term risk parameter remains required for longer-term players to move to the sidelines.

In sum, a full and aggressive bullish policy remains advised with weakness below 1.1370 and/or 1.1118 required to threaten or negate this call.  In lieu of such weakness further and possibly accelerated gains towards the 1.19-handle are expected.

Euro Index 240 min Chart

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