Updated: Sep 20, 2018
As Magic Traders, when we examine the $eurusd we can see many things are at play at this moment. We have the ability to look at the different time frame charts and determine, with great accuracy, where all the institutional supply and demand zones are located and also determine the flow of the money coming in and leaving the pair using the #cftc #CoT reports and what we have determined may shock you!
BIG PICTURE ~ on the grand picture, we have determined that the banks have plans to drop the $eurusd down towards the 1.07's within the next year or two. Then once that target is reached, the secondary target will be the 1.00's. So how have we determined this? There is something very powerful that exists in the markets and we as Magic Traders call is "The Force", yes that's right, like Star Wars and what we have determined is that there is a very powerful force pushing down on price at this very moment. in fact, Magic Trader called this reversal based on this force coming into the market back in January of this year.
When we examine the #CFTC #CoT report data, we can see that over the last four months the institutions have been clearly amounting a very large short position and while they have done this, they have worked very hard to reduce their long exposure to decent limits but their exposure is still considered very aggressive. Now although it isn't impossible for the institutions to continue pushing price lower on the charts at this point, this becomes one piece of evidence that a drop right now is most likely not to be expected.
Now I said one piece of evidence suggests a move lower is not coming right now, the second piece of evidence can be found on the weekly chart. Earlier today, mentorship members and I took part in a webinar I held and one of the things we examined was the quality of the institutional zones we had drawn on the weekly chart. Magic Traders understand that a zone is not just a zone, the all have their own individual qualities associated with them and when we are able to determine their value, we can be able to determine if the institutions will use these areas to fulfill order filling or if they will be easily removed and cause momentum to continue on through.
On the Weekly chart we were able to determine that the current weekly supply zone that the institutions created is indeed a zone that is of low quality and thus has the qualities reminiscent of those that typically get removed. Now we can never say 100% that the zone will be broken through but based on previous zones of the same characteristics, we know there is the likelihood it will be broken through.
CONCLUSION ~ What we have determined to be the most likely move we should expect in the near term is a move higher up towards the 1.18's and possibly even higher, but we don't just assume this will happen, instead we have a very key spot we are watching to see if it is removed, actually two spots. 1) 1.1746 - break higher through this price will trigger the move towards the 1.18's and 2) 1.1530 - a break lower will signify that the banks will most likely continue price lower in the charts.
There is more evidence we have found to support the conclusion of our analysis but we'll save those for another journal entry! ;) Hope you combine our thoughts with yours and you stay safe out there!