Study: what happens next when the Euro falls 6 weeks in a row


The Euro has been going down recently.

  1. The EURUSD is already down 6 weeks in a row.
  2. If it closes lower this Friday than it did last Friday, the EURUSD will be down 7 weeks on a row.


In this study we’re going to look at:

What happens next to the Euro when it falls 7 weeks in a row (using CLOSE $)

We’re also going to look at:

What happens next to the Euro when it falls 7 weeks in a row (in case this Friday closes higher than last Friday).

As you can see, the Euro’s forward returns are terrible on a short term and medium term basis. In other words, falling 6 or 7 weeks in a row indicative that the Euro is in a downtrend.
Here are the forward returns. Look at all the red.

Click here to download the data in Excel.
Here are the 4 historical cases in which the Euro fell 6 consecutive weeks.
January 20, 2015

February 16, 2010

August 7, 2000

November 22, 1999

Conclusion

This study is a short-medium term bearish sign for the Euro. It is a short-medium term bullish sign for the U.S. Dollar.
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