EURGBP: Hurst Cycles - 21st April 2022

A setup for the anticipated sellside move to the 40 week nominal low and we examine smoothing an FLD when price consolidates sideways

Tools required: Nominal Model | FLD | FLD Trading Strategy | FLD Trading Strategy (Advanced) | Principle of Nominality | Underlying Trend

Phasing Analysis

Long Term

Components greater than and including the 18 month nominal cycle

Medium Term

Components less than and including the 18 month nominal cycle

Short Term

Components around the 80 day nominal cycle

Here, the 80 day FLD is smoothed by a moving average (low pass filter) to produce a crossing point. This can be useful when price is consolidating and tracking an FLD in a sideways manner.

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Analysis Summary

In our last report on the 4th April, we speculated on the position of the 40 week component and mentioned the current 80 day nominal cycle iteration was important in determining the larger phasing.

At the short term there was clearly a move from an 80 day nominal low on the 7th of March, which is now on it’s way to forming the first 40 day component in the coming week or so. What is interesting about this move is the fact price has crossed the 20 week FLD, an FLD that should form resistance at this stage of the 40 week cycle as phased. The fact price has crossed it brings into question the placement of the 80 day low alone - it may well be the 40 week component too. Against that scenario is the clear resistance at the 40 week FLD recently and for several months now, shown on the medium term chart in green.

The next short (F category) after this move from the 40 day low (E category) will be telling: price will make new lows if the 40 week is to come in mid May. If it has occurred, it is likely price may well only retrace of a portion of the move before setting up for only the first 80 day nominal low in mid May.