No doubt all you fans are beginning to suppose your fave forex guru has flown the coop. Not a chance. I’ve just been waiting for the market to trade to a place where I have something to say. If you’re pressed for time, this is what I have to say: BUY THE €/$ with a reasonable size position, stop loss @ 1.2172.
Look at this long term chart of the €/$:
Do you see that? No? OK. No problem. Let me break it down: In June 2010, two important things happened. First, my youngest son ran the greatest 4 x 440 relay race of his life. I’ll never forget that day. Why? Because of my kid? Heck no. I don’t care about my kids. I use them to mark important events in the foreign currency exchange markets.
Secondly, it was that same day that the €/$ declined to it’s 200 month simple moving average. At that point in time, the 200 month SMA was @ 1.19228. The €/$ violated that level, falling to 1.1875, but that was a head fake to scare the bulls, and up she went. That’s another way of saying that the 200 month SMA HELD. And that’s a big deal.
So let’s look at a daily chart:
At 1.223, the €/$ would be trading down to its 200 monthly simple moving average for December 2014. That moving average , combined with an 88.6% retracement of the July 23, 2012 low and the May 9, 2014 high, indicates a substantial zone of support between 1.223 and 1.227.
I would just up and buy the €/$ at this level, with a stop loss below 1.22.