For all the currency traders out there: The euro just fell victim to a textbook "1-2-3 trend change."
In his classic trading book, Trader Vic, the great trader Vic Sperandeo laid down the best way to spot a major trend change. Vic's system is as simple as 1-2-3, and it can make you a fortune if you use it properly. Here it is...
First, a trending asset has to break its old trend line. The euro did this at point (1). Then, after declining a bit, the asset tries to match or exceed its old high, but fails. The euro did this at point (2). Finally, the asset breaks below its previous low point. The euro just did this at point (3). When this 1-2-3 process takes place, a trend reversal has occurred.
The euro soared in 2009 in kind of a mirror image to the falling dollar. Most currency advisors now consider the euro overvalued. So... you have a currency union suffering big debt problems from Greece and Ireland, you have overvaluation, and you have a textbook trend change. The path of least resistance is now DOWN.
In his classic trading book, Trader Vic, the great trader Vic Sperandeo laid down the best way to spot a major trend change. Vic's system is as simple as 1-2-3, and it can make you a fortune if you use it properly. Here it is...
First, a trending asset has to break its old trend line. The euro did this at point (1). Then, after declining a bit, the asset tries to match or exceed its old high, but fails. The euro did this at point (2). Finally, the asset breaks below its previous low point. The euro just did this at point (3). When this 1-2-3 process takes place, a trend reversal has occurred.
The euro soared in 2009 in kind of a mirror image to the falling dollar. Most currency advisors now consider the euro overvalued. So... you have a currency union suffering big debt problems from Greece and Ireland, you have overvaluation, and you have a textbook trend change. The path of least resistance is now DOWN.
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