EUR - Fundamentals vs Technicals
Have you ever come across this question in your mind? Which is more superior, Fundamental Analysis (FA) or Technical Analysis (TA)? In my opinion, each of them have their own merits and their own weaknesses. It all depends on your style of trading and what suits you better.
If you are the academic type and must know every reason behind each market move, then probably FA might suite you better. TA might be more suited for those who are more in tune with pattern recognition. The human brain has naturally develop to better process visual and auditory patterns.
As for me personally, I am becoming more and more a Technical trader. In recent years, in my observation, the market just does not behave rationally to the fundamental news releases.
Let's have a look at the EURUSD. The ECB recently announced that they have dropped the pledge to continue buying bonds if needed. This stand will close the liquidity tap and this would mean a more hawkish views on the EUR. Hence FA wise, we should be seeing strength on the EUR.
EURUSD did rally to this news release, but only did so for one to two hours. If you are a short term FA trader, you would have caught the rally and made money. Our trading community spotted a bearish pattern to sell and traded accordingly at the Type 2 bear deep crab pattern. (Closed with +88pips)
Looking on a bigger time frame, the EURUSD weekly chart is showing me a significant bearish divergence. This points to the EUR heading much significantly lower to probably 1.20 levels.
Harmonic Patterns traders will be looking at a buy at the completion of this bullish Shark/Gartley Pattern at around 1.2000/30. At this moment, I would like to look for continuation sell all the way down to that level.
So whether you are an FA or a TA trader, trade with well and trade right. All the best !!
Let's look forward to next week's trade.
For those of you who missed my CADJPY trade, I believe we still have a long way to go.
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