Sometimes the Euro just gets a wild hair and today’s overnight session was a clear example. In just one hour after the Asian open the EUR dropped 100 pips . . to stop and reverse dead on 133.00 . . once again reflecting an affinity for whole number attraction.
The subsequent short term action clouded the Dipper setups before the EUR managed to rally back up to 134.00 in time for the US open. Odds are we see 133 again before the week is over. The reason I show this snippet of the chart is twofold: first, note that the MACD settings have been optimised to 7,20,5 reflected a 25% reliability improvement over the default 12,26,9 settings based on a 6 month backtest. Keep in mind these are unique to the EUR; the GBP and JPY have different best practice parameters. Second, as mentioned previously the correlation of the LR7/14 lines and the 8/8 channel in conjunction with the MACD signal is dramatically illustrated at 8:05 when a perfect storm of negativity sets in. This triple threat setup is not infrequent but this particular example is unique for its clarity.
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