EURUSD- currently is trading in a range since October 21.
Global recession, panic and fears have pushed this pair from 1.6 to 1.23 in 14 weeks. A 3700 pips move straight down.
However the market is refusing to push it further or allow EURUSD to give us an appropriate correction to the upside so far. Instead we are lucked in a range for the last 6 week, starching mainly from 1.2400 to 1.3
Interestingly, this is the exact same price range the EURUSD was trading in during 2006.
In that year the EURUSD was lucked in between 1.2450 to 1.2970 from May until November. When it finally broke the range on November 24 with some heavy volume, it didn’t bother to look back before reaching the top of 1.6036 in 2008, and there and then completing a major uptrend.
Of course this took almost a year and a half to achieve (75 weeks to be exact).
When we look at the big picture- : First, EUR/USD traded the current range already back in 2006, then the market broke this range, advanced to top at 1.6036 in 75 weeks time, then a major economic crisis drops the price back to the same trading range in 14 weeks, 5 times faster than it took the pair to climb to the top.
If history repeats it self, as technical analysis assumes, when the market will clearly break the range this time, it should lead us a long way in the direction of the break.
When I say a clear break, I mean at least one large weekly candle closing clearly above or below the current price range.
If the break will take place to the up side, it might quickly lead us up to 1.3350 and maybe even as far as 1.3650.
If it will break the range to the down side, we might get to meet 1.1890 – a major support level which proved itself worthy in 2004, 2005 and in 2006.
I’ll come back and update you on this when EUR/USD will start making some serious progress.
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