Forex Investment and Currency Trading

• Prior bear market was approximately 7 ½ years from peak to trough with 3 major lows posted in 1987,1991 and 1992
• This move began in earnest in Feb 2002 with major lows posted in 2004 and 2008
• The USD bear market is now reasserting itself and that we can see a new trend low, possibly in late 2009

EURUSD

• The 1985-1992 USD bear market compared to the 2002-2009 bear market????
• Prior market peaks were 1987 (2 years) 1991 (Extra 4 years) and 1992 (extra 18 months)
• So far peaks have been 2004 (2 years) 2008 (extra 4 years) and 2009 (Extra 18 months?????)

Similar marginal high would suggest 1.65 next year.

How what was the path of the 1991-1992 move?????

EURUSD 1991-1992

• After the trend peak at 1.4212 in Feb 1991 EURUSD fell to 1.1160 over the following 5 months (21.47%)
• This became the base for the next rally with the first impulsive move taking place from 1.1160 and reaching 1.3525 on 08 January 1992 before a sharp pullback to 1.2125 and a renewed rally to 1.4576 by early September for a total low to high move of 30.60%.
• The very impulsive part of this move began in October (13.65% into the 8 January high) compared to 14% from late August 2004 into the 30 December high.
• How does all this compare to 2008??????
• The 1.6040-1.2329 was a 23.1% fall over 3 months
• A similar magnitude rally off the lows would suggest something in the region of 13.5%-14% by end December/early January. This would equate to about 1.43+ if taken off the October platform. Above here major moving average resistance comes in just above 1.47. and the 76.45 pullback level at just over 1.51.
• All this suggests a danger that this leg of the move could continue into year end or just beyond (1.47-1.51) after which we could be subject to a pullback as we were in both 1992 (Q1) and 2005 (much longer as a consequence of HIA) to maybe 1.37- 1.40 followed bay a rally to new highs in the region of the low to mid 1.60’s later in the year.

EURUSD Fall in 1991 before bear market for USD resumed into 1992 compared to fall in 2008