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Filtrowane przez tagi:  Mean Reversion
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U.S. dollar gaps lower, as does Turkish lira

Price action in the dollar so far playing out as expected, a small gap lower followed by some strength. USD/TRY, however, gapped the other way, now retracing nearly 50.0% of the November - January downswing. 3.84 - 3.85 is the resistance. A reversion to 3.775 is possible in the near term.
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EURo starts the week sideways

Monday morning snooze fest turned into some U.S. dollar strength after noon, but which was soon followed by a mean reversion move back into the snooze area.
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EUR/SEK Stays in Range All of 2017

The EUR/SEK is having another ranging year. The pair opened 2017 around the 9.57 handle is now quoted at 9.61, a percentage change of less then half of 1%.
But going back in time doesn't change the picture (see below). Here too we're seeing this currency pair locked in a range most of the time too. In fact except for a brief excursion above the 10 round figure during the US election last year, the EUR/SEK stayed remarkably flat.
The larger range spanned from 9.11 to 9.80, or around 7 percent. Th…
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EUR/GBP Returns to the Mean

The EUR/GBP is slowly returning to the mean. In August the pair dropped from a high of 0.9261 to close the month off at 0.8815. After the large gains during the past few months the pair is finally losing some ground.
But as can see on our next chart, the long-term trend on the weekly chart is still very bullish. These two conflicting trends as well as the congestion area the pair is in right now (see rectangle on chart one) should keep prices in range. Thus I'm betting on more range for the EUR/…
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Range-bound Moves Persist in EUR/SEK

The smaller range-bound moves persist in the EUR/SEK. The pair opened March around the 9.55 handle and is currently trading at 9.4533, a percentage change of just over 1 percent. The chart also demonstrate a classic V-shaped reversal pattern.
Our second chart below also shows this V-shaped pattern but on much bigger timescale, the weekly chart. Here too we're seeing the EUR/SEK range-bound behavior.
This currency pair keeps being brought back to the 9.50 area, no matter how much it tries to stra…
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Swedish Krona Stays Flat in July

The Swedish Krona stayed mostly flat during July. The pair opened the month at 9.62 and closed it at 9.55. In percentage terms this is only 0.73%.
The chart above shows that this range narrowed further during the second part of the month. During this time-period the EUR/SEK moved between a low of 9.50 and a high of 9.62. But most of the time was spend in the middle of this range doing nothing.
On the longterm weekly chart above we see that the current smaller 4h range in right in the middle. In …
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EUR/GBP Overbought on Larger Timeframes

The EUR/GBP is overbought on the larger timeframes. The pair had a +600 pips rally since April of this year and +2,000 pips rally since the lows hit in 2015.
For a mostly range-bound pair this is too much. Technical indicators seem to confirm this view. The Stochastic Oscillator on the weekly hart is showing a value over 80, indicating overbought market sentiment.
Our final chart below shows that things aren't looking rosy for the bulls on the shorter-term charts either. Here we see the EUR/GBP …
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Multiple Studies Says EUR/SEK to Stay Near Longterm Average

This is one of those pictures that's worth a thousand words. The chart below shows mutiple studies confirming my view that the EUR/SEK will stay near its long-term average. First we have the 200 month moving average in blue. It's currently at 9.277, only 5 percent away from the current market price. This means that the current price is just a few days worth of trading away from its average during the past 16 years.
If that doesn't show you the state of this currency pair, there's more! Notice th…
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Gains in EUR/GBP Likely Over

The EUR/GBP is approaching overbought levels. After the latest 400 pips rally on the daily chart below we peaked at 80 on the Stoch and we're now dropping down. The gains likely coming to an end here.
On our second chart below we're seeing that this currency pair has been range-bound for almost one year, since September of 2016. Notice the swings up and down, every rally is being sold into while every drip is being bought. Furthermore here too we're seeing the Stochastic Oscillator above 80, sig…
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Swedish Krona Settles Back in Range

The Swedish Krona is settling back into its long-term range against the Euro. The pair ventured above the highs of this range at 9.7291 during the chaos after Trump's election victory. But since then we've seen that move slowly retraced back down.
We are currently quoted substantially below the 9.7291 resistance level. And as we can see on our next chart below, the situation doesn't look better on the lower time-frames either. Here too we're seeing range-bound price movement.
The pair opened the…
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fxsurprise8 avatar

UPDATE 3: The pair continues to follow mean reversion, albeit in a bit larger range. Today a low of 9.5412 was hit, soon followed by a high of 9.5734.

Few hours later the momentum shifted again, this time to the downside. The EUR/SEK eventually closed the day at 9.5450, barely changed from the 9.5490 open.

We are currently quoted at 9.5454, only 0.14 percent away from my targeted price. Everything continues to go according to my plan here.

fxsurprise8 avatar

UPDATE 4: It's starting to look like Groundhog Day here as we got another day with high volatility but little decisive movement in the EUR/SEK.

First the bulls pushed prices all the way up to 9.5679, just below yesterday's high at 9.5734. This was quickly followed by heavy selling again that took us to a low of 0.95435.

We are currently quoted at 9.5451, almost no change compared to the price noted in my previous update (9.5454). Clearly mean-reversion is still at play here.

fxsurprise8 avatar

UPDATE 5: This pair continues to perform mostly as expected. It's now trading at 9.5558, drifting even closer to my forecasted price at 9.5588.

Let's examine what happened this month. We opened at 9.5573, then rallied to a high of 9.6295 only to get sold into a low of 9.4560 just few days later.

From here however we got yet another mean-reverting move that brought us back toward the 9.5500 area, where we are trading right now. Clearly my original call for range-bound market in March has been right so far!

fxsurprise8 avatar

UPDATE 6: This for another update, this time with a chart. Let's put in a picture what we've been saying in words.

The picture shows the EUR/SEK price action during March. Let's examine what happened this month. We opened at 9.5573, rallied to a high of 9.6295 only to get sold into a low of 9.4560 just few days later.

We closed on Friday at 9.5526, barely changed compared to the monthly open. With only half day of trading left on Monday in this contest, odds look good for a top position!

fxsurprise8 avatar

UPDATE 7: The Euro is having a small revival with the start of the week across the board. While most EUR pairs closed near the lows on Friday, in the early hours on Sunday we're seeing them slowly creep back up!

The Swedish Krona had an interesting start to the week. First we gapped opened lower to 9.5436, only to rally back to 9.5572 right now.

This is only 16 pips away from my forecasted price, or 0.02% in percentage terms. If things don't change much on Monday, I have a real shot at the first place position this month!

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