Joshua Brown's  Instablog

Joshua Brown
Send Message
After obtaining degrees in Economics, Finance and Business Management from RMIT University in Melbourne, Australia, Josh went on to work for prestigious companies such as Goldman Sachs JBWere, the Commonwealth Bank of Australia and AvaTrade. In all, Josh has worked in the financial sector since... More
My company:
The Alpha Generator
My blog:
The Trading Spotlight Blog
  • At What Point Does The EUR/USD Become Oversold? 0 comments
    May 9, 2014 1:31 PM | about stocks: EUO, FXE, USDU

    and when should we go long to take advantage of a reversal?

    (click to enlarge)

    Perhaps we can see a correction to the historical support. A move above that could indicate a reversal. A buy order may be profitable at this level.

    In this chart, I've included some oscillating indicators to help us decide if the EUR/USD is oversold and make a prediction about when we can jump into the market and take a long position. I must admit that predicting the bottom carries enormous amount of risk, but the rewards are worth the effort. Considering Draghi hasn't actually lowered the interest rate, and he could be just jaw boning the currency lower, the market will probably call his bluff (again) and we should see the price rise next week according to many analysts.

    An explanation of the Indicators:
    Stochastic RSI - Oversold. When indicator climbs back into the channel. Then buy.
    CCI - Oversold. When indicator jumps back into the channel, again a buy signal. Historically oversold except for an instance in early April. In this case the price also bounced up again.
    Momentum - This one is interesting and somewhat subjective. Go long when the price jumps up above the black line which represents the historical support line in the actual price chart. Historically oversold.
    RSI - Oversold. Go long when the price goes back into the channel. Historically oversold.

    Stocks: EUO, FXE, USDU
Back To Joshua Brown's Instablog HomePage »

Instablogs are blogs which are instantly set up and networked within the Seeking Alpha community. Instablog posts are not selected, edited or screened by Seeking Alpha editors, in contrast to contributors' articles.

Comments (0)
Track new comments
Be the first to comment
Full index of posts »
Latest Followers


More »
Instablogs are Seeking Alpha's free blogging platform customized for finance, with instant set up and exposure to millions of readers interested in the financial markets. Publish your own instablog in minutes.