<\/p>\n
EURUSD has been among the major losers of the Ukraine – Russia war and this has accelerated the bearish trend towards a Higher Lows trend-line that has been holding since late 2016.<\/p>\n
This chart illustrates the pair on the 1W time-frame but with the CCI indicator below on the 1M (monthly) time-frame. This analysis manages to display the pair’s long-term cycles and a very distinct pattern that is unfolding for the 3rd time in more than 3 decades.<\/p>\n
As you see every prior Higher Lows trend-line held on 3 occasions until a strong break downwards occurred that pushed EURUSD to Lower Lows aggressively. With the price now at its closest(almost on) to the Higher Lows trend-line since March 2020 (COVID crash), the key question is, which part of the Cycle are we on? Higher Low (3) or on the verge of breaking downwards?<\/p>\n
In Legs terms this looks like Higher Low (3). The 1M CCI though shows that we may be on the verge of a Break as it has broken below -150.00 and every time the pair has done so in the past 30 years, the Break below the Higher Lows trend-line occurred (exception December 2016).<\/p>\n
A break below the Higher Lows could complete at least a -20% drop from the previous top of December 2020, as the previous two breaks delivered roughly -25% and -28% corrections respectively. On the other hand, if this is Higher Low (3) and it holds, this can be the start of a very aggressive multi-year rise to new Highs.<\/p>\n
Tradingview link:<\/p>\n