EURUSD: the 18 month cycle trough 6


Hello all

I would like to introduce you a new view of the potential important trough the Euro may be doing right now.

This new view is based on my cyclic indicator I’m currently using. First, I think it is better to take a look at these graphs: weekly time frame at the left, daily at the right

EURUSD weekly

I would like to explain a little about what it does and what we see. There are 3 important pieces of information: the channels, the oscillations and the expected time of reversal.

The core of the software is based on displaced moving averages, with this base, channels and oscillations are constructed.

The channels tell us support and resistance, points where we find a nest of channels are of course very important.

Bellow the graph I show you a spectrum of 4 oscillations, from larger to smaller. Normally, the second position (with yellow numbers at the right) corresponds to the dominant cycle of that graph. In this case, at the weekly chart it is shown M: 34, (it must be multiplied by 2) it is 34 x 2 = a 68 weeks oscillation or around 15 months oscillation. At the daily we have M: 27, so, 27 x 2 = 54 trading days or 10 weeks, and so on. The upper channel corresponds to these dominant cycles.

The white blue box indicates a projection of the estimated time of reversal. This box shift in relations to the dominancy, but it may be another discussion.

So, what we are seeing??

The daily channel is pointing downward, with prices sloping with the support channel. All oscillations are in the trough zone. In the weekly, prices are at the channel support and oscillations have just entered into trough zones…. the dominant oscillations for the weekly and daily are, right now, 68 weeks and 10 weeks

If it is the case, EURUSD is forming as much as an 18 month cycle trough.

But, could it be of a longer degree?…. Hard to tell it!!!

Let’s see a monthly graph

EURUSD Monthly

In this graph I want to point that the dominancy has shifted from longer cycles to shorter ones, to the 18 month cycle!!. The longer oscillations are flattening, let’s say, loosing personality, dominancy. Hard to say when it would shift again, but the EURUSD could run to the upper channel.

Hope to help!

Best regards

 

José


About José

My passion for market analysis was born 25 years ago when I started to work at a bank's trading desk, which I did for 8 years. Since then I have never disconnected from the markets but have been involved with varying intensity. I define myself as a serial entrepreneur, launching different start ups, together with my closer colleagues, in areas like dot com business or R&D in energy efficiency. In 2009 I started to trade markets as my principal task, in early 2010 I discovered Hurst and Sentient Trader's "academy". Since then, cycles and trading have become my way of living!


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6 thoughts on “EURUSD: the 18 month cycle trough

    • José Post author

      Thank you for your comments, David.

      Yes, it is what I’m suggesting, the nominal 4,5 years seems to be losing punch meanwhile the nominal 18 months is having rhythmical oscillations. On the other hand, I must point that I think that the current 18 month cycle would be running short of around 15 months

      Best

      José

  • William Randall

    Hi Jose’.

    I agree that the 4 year wave has lost dominance over the past several years. It has put in two lower highs which are about three years apart. The highlighted portion of the lower filter output on the chart below shows the diminution of the amplitude. The chart also shows how dominant the 18 month wave (upper filter output) has become. The shorter waves on the daily chart are being completely crushed by this downtrend (no cherrypicking for me!). I don’t know how valid that 16 year wave tracked by the envelope is due to lack of data but the price action theoretically should get to the bottom of that envelope eventually.

  • Alex Antoniou

    Good day everyone. Although i love Hurst cycles, i would like to put my input in some deeper and more precise analysis sourced from WD Gann, who borrowed physics and more especially theories of multiple vibrations from the legendary Nikola Tesla.
    Gann’s ” D8 along with Base 7″ theory are not available in the market.

    Since one year has 365 days and one circle has 360 degrees , we consider 1 day to 1 degree of the circle which was translated to “cycle”.
    The most important circles are those are those who define a rapid long swing movement , because only there we can apply those theories and divide the circle into 4th’s and 8th’s ( one year has 4 seasons )
    The most important rapid swing in the Eur/Usd is the Nov 09′ : 1.5142 => June 10′ :1.1875. ( monthly chart for better view ) And this swing is one CIRCLE which is more important than a “cycle”, because if we divide this circle into 8th’s then we have an absolute symmetry in the market as David mentions in the Hurst theories.

    Respectively we have :12.5% => 45 Degree angle = 1.2283 ,25% =90 degree angle = 1.2691 , 37.5% of the circle = 135 degree angle ,= 1.31 , 50% = 1/2 circle = 180 degree angle = 1.3508 , 62.5% = 225 degree angle =1.3917, 87.5% = 315 degree angle = 1.4734. The most important angles are the 0 , 90, 180, 360, in other words the ones that divide the circle into 4, angle triangles so that the Pythagorean Theory can be applied . Respectively if you look at your monthly chart you will see :Nov 10′ high : 1.4260, Jan 11 low :1.26 , May 11′ high :1.4948 ,
    On Nov11′ it stopped on the 180 degree angle and HAD to check the 225 angle :1.3917 it almost hit the 270 degree angle and continued its’ bearish movement to the 90 degree angle on Jan12′ low :1.2691, back to the 180 degree @ 1.35 and then continued the bearish movement to the 45 degree @ 1.2280 and with the monthly bearish momentum July 12′ low 1.2040…Aug closed @ 1.2565 : )=45 degrees ! : )

    So let’s go to Oct 14′. The 90 Degree angle was the 1.2677 and the last couple of days it was going back n’ forth and now it hit 1.26 , but tomorrow it’s the end of Sep and Oct is another monthly candle, so either it finishes its momentum now and we have a bullish Oct, or in the worst case it hits the 1.23 level 45 Degrees and then it completes the circle and the 18 month cycle.

    Fortunately , there is exact knowledge for the absolute high’s and low’s of a year.
    I am here to stimulate you with the “Socrates method” and not not give you exactly the food in the plate : )
    This source of knowledge is strictly unavailable and it combines many Gann’s theories, Tesla’s Law of multiple vibrations and some input of mine ….

    Feb3rd 2014 low : 1.3475 => SQRT = 1.1608
    1.1608 + 0.0225 ( please don’t ask me what this is !! ) = 1.1833
    1.1833 x 1.1833 = 1.40.
    May8th high : 1.3992 : ))))
    Finding the absolute high of the year, we can calculate the EXACT low the year with the exact date …: ))))

    I consider Nicola Tesla the most important and brilliant scientist ever existed. Had he engaged in trading like Gann did ( who was twenty years younger and studied his inventions ) he would have become a multi – billionaire.
    He devoted instead his life to science and he will remain in History as a Great inventor.
    Based on his theories which are of course concealed , Some Government agencies are able to predict accurately the momentum of their leaders simply by their date and place of birth, and their name , and they ” build” them accordingly…

    Trading is much more deeper than indices and oscillators . It’s History, Physics, Mathematics, Chemistry, Astronomy, Astrology. Personally . i combined all those sciences to come out with solid science results.

    “Ask and you shall find” : )