Sive Morten
Special Consultant to the FPA
- Messages
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Monthly
On big picture we see price bounce from support. It is difficult to say whether this reaction on yearly pivot or on 50% support level – anyway bounce has started, we’ve talked about it much in our day-by-day analysis. On passed week market did an attempt to proceed higher, but failed – we can see this by upper shadow on April bar. Now here is a big temptation to call it as “bullish engulfing” pattern, but Arpil bar has not closed yet. Anyway this probably will be treated just as retracement, because we need breakout of 1.3710 highs to speak again about bull trend. Until this will not happen – price action will remain just retracement.
Besides, nobody has cancelled bearish engulfing pattern and I see nothing curious with this minor bounce. If you will take a look at engulfing patterns, especially on long-term charts, you’ll see that in most cases some at least small retracement happens after pattern has been completed. And here we have support right below it. As the conclusion of monthly analysis we can say that we have bearish pattern that points on long-term perspective down to 1.25 area. Hence current bounce could be used as a rally to Sell into and we could get some AB=CD down, based on bearish engulfing. Still this hardly will happen soon, since on lower time frames the retracement probably will be a bit extended in time and complex - AB=CD pattern as well. So, downward action of previous could not nessesary mean the downward continuation here, but BC leg of deeper upward retracement.
Weekly
I will not repeat the same things that we’ve talked in previous research – all of them are sitll valid. Today I would like to offer you to take a look at current weekly action purely from harmonic point of view. May be it is not quite reasonable and adequate approach of analysis, but it agrees with nearest our expectation and could become interesting an useful.
On weekly time frame the major pattern that we have is H&S (that is, in fact, bearish engulfing on monthly, right?). Take a close attentive look at the shape of left shoulder, see – it has the shape of downward AB-CD pattern. Now I ask you to imagine the mirror of it in relation to head, as I’ve drawn it. Thus, left shoulder was formed within 11 weeks, and our current upward action is a mirror to left shoulder’s downward – to the neck line. By “check sign” I’ve marked the candle where we are now in relation to left shoulder.
By this comparison we see, that within next two weeks there should be retracement to 50% support level, and then 2-3 weeks final upward leg to 50% resistance that market has not quite reached yet – and that is also triple harmonic swing target on daily time frame. Only after that the downward continuation due monthly bearish pattern should follow.
May be this is too ideal illustration, but harmony fulfillment precision sometimes scares me. It’s obvious that here and there market could skew a bit from perfect scenario, but the core could hold. The importance of this analysis stands with clear picture that we have by it. When we will track market performance and compare it with this pattern – we easily can understand will it agree with it or not. If not – it will be early sign to stop and wait for further clarification. But for past two weeks market moves 100% with expectations as on weekly as on daily time frames. Currently I do not see any resons to abandone this setup.
Hence, by this analsys and things that we’ve discussed on previous week, we probably should be ready for moving to 1.29-1.2950 area within nearest 2 weeks. This area could be reached even faster – on next week for example, but harmonic analysis suggests that market will coil around for some time, before will make second leg up to 50% resistance 1.3250 area.
Daily
Major thoughts have been said already in our daily updates. Here is have nice bearish context by two different patterns. First is Schwager bullish trap, a.k.a. upward flag breakout failure. Recall that initially current consolidation is looked like bullish flag that assumed upward continuation. This continuation has followed but failed soon and price has returned back to flag body. This assumes downward continuation. Simultaneously this failure breakout has taken the shape of bearish engulfing pattern at major 3/8 resistance. May be this was W&R of it as well.
Second pattern is DiNapoli “DRPO” Sell. The minimum target of it is 50% support of whole upward thrust. But my thought that better to rely on intraday AB=CD that is based on engulfing pattern. It points on a bit deeper retracement – around 1.2920-1.2950. Take a look how 3x3 DMA (green line) holds the upward retracement – although market has penetrated it, but all closes after DRPO was confirmed stand below it.
4-hour
In fact that is our major chart for work on coming week. It holds all neccesary information. As we’ve discussed yesterday, market has shown AB=CD upward action has reached 50% retracement that we’ve planned to achieve. Thus everything has done with this bounce up – it’s time for downward continuation. From that standpoint we have classical H&S, although it looks ugly a bit, we have bearish dynamic pressure (look how market creeps down, although MACD shows upward trend).
If we will get AB=CD move that we expect – price will reach an Agreement with major 5/8 support that will be perfect area for long entry with 1.3250 target. Most of you should already have short positions, but if have missed the entry at 50% resistance – we will try to solve this problem on hourly chart.
30-min
Here is a bit difficult to make a precise analysis. Particularly speaking – whether market will touch WPP first and then continue move down or it will initially complete targets around 1.3015 area and then turn to pullback.
Anyway, here we have some kind of Double Top pattern (it looks much better on 15-min chart) that has the same target as downward AB-CD. For those of you who has missed the entry at 50% resistance will be the chance to enter on possible minor pullback. Here we have to keep in mind couple of moments. First is – market stands not at support and oversold and in fact has a free area till the neckline around 1.3000. Second, EUR is a good trending market which means that as trend starts EUR very rare shows extended retracements. As a rule they are 50% from most recent swing as AB-CD or even minor – just 3/8 bounce. Thus, don’t count on deep retracement up here. If market will start some upward action right on Monday – they keep an eye on WPP or even lower 1.3050 level, while if downward action will continue – the first pullback probably will happen only after reaching 1.30-1.3015 area and you will be able to come on board. Other words – montinor move down and try to catch first rally to sell.
Conclusion:
Despite the moment that long-term picture is bearish, in medium-term perspective market looks bullish and gives hints that it could show deeper retracement up within 3-4 weeks. Probable target of upward retracement is 1.3250 at minimum.
In the perspective of nearest week we expect deep retracement down to 1.2920-1.2950 area and in a fortnight second stage of daily AB-CD move to 1.3250.
The technical portion of Sive's analysis owes a great deal to Joe DiNapoli's methods, and uses a number of Joe's proprietary indicators. Please note that Sive's analysis is his own view of the market and is not endorsed by Joe DiNapoli or any related companies.
On big picture we see price bounce from support. It is difficult to say whether this reaction on yearly pivot or on 50% support level – anyway bounce has started, we’ve talked about it much in our day-by-day analysis. On passed week market did an attempt to proceed higher, but failed – we can see this by upper shadow on April bar. Now here is a big temptation to call it as “bullish engulfing” pattern, but Arpil bar has not closed yet. Anyway this probably will be treated just as retracement, because we need breakout of 1.3710 highs to speak again about bull trend. Until this will not happen – price action will remain just retracement.
Besides, nobody has cancelled bearish engulfing pattern and I see nothing curious with this minor bounce. If you will take a look at engulfing patterns, especially on long-term charts, you’ll see that in most cases some at least small retracement happens after pattern has been completed. And here we have support right below it. As the conclusion of monthly analysis we can say that we have bearish pattern that points on long-term perspective down to 1.25 area. Hence current bounce could be used as a rally to Sell into and we could get some AB=CD down, based on bearish engulfing. Still this hardly will happen soon, since on lower time frames the retracement probably will be a bit extended in time and complex - AB=CD pattern as well. So, downward action of previous could not nessesary mean the downward continuation here, but BC leg of deeper upward retracement.
Weekly
I will not repeat the same things that we’ve talked in previous research – all of them are sitll valid. Today I would like to offer you to take a look at current weekly action purely from harmonic point of view. May be it is not quite reasonable and adequate approach of analysis, but it agrees with nearest our expectation and could become interesting an useful.
On weekly time frame the major pattern that we have is H&S (that is, in fact, bearish engulfing on monthly, right?). Take a close attentive look at the shape of left shoulder, see – it has the shape of downward AB-CD pattern. Now I ask you to imagine the mirror of it in relation to head, as I’ve drawn it. Thus, left shoulder was formed within 11 weeks, and our current upward action is a mirror to left shoulder’s downward – to the neck line. By “check sign” I’ve marked the candle where we are now in relation to left shoulder.
By this comparison we see, that within next two weeks there should be retracement to 50% support level, and then 2-3 weeks final upward leg to 50% resistance that market has not quite reached yet – and that is also triple harmonic swing target on daily time frame. Only after that the downward continuation due monthly bearish pattern should follow.
May be this is too ideal illustration, but harmony fulfillment precision sometimes scares me. It’s obvious that here and there market could skew a bit from perfect scenario, but the core could hold. The importance of this analysis stands with clear picture that we have by it. When we will track market performance and compare it with this pattern – we easily can understand will it agree with it or not. If not – it will be early sign to stop and wait for further clarification. But for past two weeks market moves 100% with expectations as on weekly as on daily time frames. Currently I do not see any resons to abandone this setup.
Hence, by this analsys and things that we’ve discussed on previous week, we probably should be ready for moving to 1.29-1.2950 area within nearest 2 weeks. This area could be reached even faster – on next week for example, but harmonic analysis suggests that market will coil around for some time, before will make second leg up to 50% resistance 1.3250 area.
Daily
Major thoughts have been said already in our daily updates. Here is have nice bearish context by two different patterns. First is Schwager bullish trap, a.k.a. upward flag breakout failure. Recall that initially current consolidation is looked like bullish flag that assumed upward continuation. This continuation has followed but failed soon and price has returned back to flag body. This assumes downward continuation. Simultaneously this failure breakout has taken the shape of bearish engulfing pattern at major 3/8 resistance. May be this was W&R of it as well.
Second pattern is DiNapoli “DRPO” Sell. The minimum target of it is 50% support of whole upward thrust. But my thought that better to rely on intraday AB=CD that is based on engulfing pattern. It points on a bit deeper retracement – around 1.2920-1.2950. Take a look how 3x3 DMA (green line) holds the upward retracement – although market has penetrated it, but all closes after DRPO was confirmed stand below it.
4-hour
In fact that is our major chart for work on coming week. It holds all neccesary information. As we’ve discussed yesterday, market has shown AB=CD upward action has reached 50% retracement that we’ve planned to achieve. Thus everything has done with this bounce up – it’s time for downward continuation. From that standpoint we have classical H&S, although it looks ugly a bit, we have bearish dynamic pressure (look how market creeps down, although MACD shows upward trend).
If we will get AB=CD move that we expect – price will reach an Agreement with major 5/8 support that will be perfect area for long entry with 1.3250 target. Most of you should already have short positions, but if have missed the entry at 50% resistance – we will try to solve this problem on hourly chart.
30-min
Here is a bit difficult to make a precise analysis. Particularly speaking – whether market will touch WPP first and then continue move down or it will initially complete targets around 1.3015 area and then turn to pullback.
Anyway, here we have some kind of Double Top pattern (it looks much better on 15-min chart) that has the same target as downward AB-CD. For those of you who has missed the entry at 50% resistance will be the chance to enter on possible minor pullback. Here we have to keep in mind couple of moments. First is – market stands not at support and oversold and in fact has a free area till the neckline around 1.3000. Second, EUR is a good trending market which means that as trend starts EUR very rare shows extended retracements. As a rule they are 50% from most recent swing as AB-CD or even minor – just 3/8 bounce. Thus, don’t count on deep retracement up here. If market will start some upward action right on Monday – they keep an eye on WPP or even lower 1.3050 level, while if downward action will continue – the first pullback probably will happen only after reaching 1.30-1.3015 area and you will be able to come on board. Other words – montinor move down and try to catch first rally to sell.
Conclusion:
Despite the moment that long-term picture is bearish, in medium-term perspective market looks bullish and gives hints that it could show deeper retracement up within 3-4 weeks. Probable target of upward retracement is 1.3250 at minimum.
In the perspective of nearest week we expect deep retracement down to 1.2920-1.2950 area and in a fortnight second stage of daily AB-CD move to 1.3250.
The technical portion of Sive's analysis owes a great deal to Joe DiNapoli's methods, and uses a number of Joe's proprietary indicators. Please note that Sive's analysis is his own view of the market and is not endorsed by Joe DiNapoli or any related companies.
