FOREX PRO WEEKLY, December 05 - 09, 2016

[Sive Morten]

Fundamentals

(Reuters) The dollar fell broadly on Friday after posting gains the last three weeks as a solid, but not spectacular, U.S. non-farm payrolls report stirred doubts about the path of rate increases next year.

Analysts, however, said the dollar's weakness was just a short-term correction, a much-needed one, after a strong rally in the wake of Donald Trump's victory in the U.S. presidential election on Nov. 8.

The dollar index posted its first weekly fall in four weeks against a currency basket, but was still up 1.7 percent for the year. The U.S. currency also slid against the Japanese yen, hitting session lows after the jobs data, but showed gains for a fourth consecutive week.

Nonfarm payrolls increased 178,000 jobs last month, but data for September and October were revised to show that fewer jobs were created than previously reported. Wage growth for the month was just 2.5 percent, compared with expectations of 2.8 percent, unchanged from October.

"I think the market was a little less excited about wage growth this past release, but in general, my view on the dollar has not changed. This is just some profit-taking, some squaring up of positions," said Ron Waliczek, managing director of OTC FX and interest rates at INTL FCStone Inc in Chicago.

"I do think that the dollar has another leg up, about 6-7 percent toward the 107, 108 level in the dollar index."

In late trading, the dollar index fell 0.3 percent to 100.77. It was down 0.7 percent for the week. Against the yen, the dollar fell 0.4 percent to 113.69 yen.

Marvin Loh, global markets strategist at BNY Mellon in Boston, said the jobs report did not provide much clarity on future U.S. interest rate increases.

"We think there are enough yellow flags to support the slow and shallow path endorsed by the Fed, which expected only 2 hikes this past September," Loh added.

The euro, on the other hand, was flat against the dollar at $1.0657 , ahead of Sunday's Italian referendum. The referendum could reject constitutional reforms on which Prime Minister Matteo Renzi has staked his political future.

Renzi's departure could destabilise Italy's fragile banking system and be taken as another sign of rising anti-establishment sentiment around the world, potentially eroding investor confidence in the euro.

The euro's one-week implied volatility, a gauge of the currency's expected movements in either direction, rose on Friday to the highest level since Britain's June vote to leave the European Union.

Currently, guys, we have three important fundamental questions - what will hapen with USD in nearest time, how we should treat recent job report and what does recent number mean? Second - what to expect from Italy referendum, is it really so few chances on "yes" result? Finally - what to expect from ECB on next week, and what decision will be on their QE program?

Here we will give you opinion of Fathom consulting. Usually we put some researches totally, but today, as we have a lot of different questions, we bring just major toughts on every subject:

1. ECB meeting on 8th of December and QE program:

- Core inflation remains weak as the ECB prepares QE extension

- Euro area headline inflation climbed to 0.6% in the twelve months to November, up from 0.5% in October.
More tellingly, core inflation remained unchanged at 0.8% for the fourth consecutive month, having flatlined since 2014.

- With economic growth tepid, underlying inflation persistently weak, and heightened political uncertainty, it is increasingly likely - in our view - that the ECB will delay and praywhen it meets next week.

- Specifically, we expect the ECB to announce an extension of its QE programme from March 2017 to September 2017, while keeping the amount of monthly purchases unchanged at €80 billion and increasing the issue and issuer limit from 33% to 50%.

2. USD perspective
- Tumbling unemployment points to tighter US labour market

- Friday's US jobs report for November confirms what everybody already knew: that the FOMC will probably raise the fed funds rate later this month.

- The 178,000 rise in nonfarm payrolls was a touch higher than our forecast of 165,000, while average hourly earnings slipped by 0.1%, after jumping 0.4% in the previous month.

- However, the real story today was the drop in the unemployment rate from 4.9% to 4.6%. The participation rate fell, yes, but it is still higher than it was earlier this year.

- Readings can be distorted from one month to the next, but the falling unemployment rate is consistent with a tight labour market and a low breakeven rate of payroll growth, whichwe estimate to be around 60,000 per month.

- Looking ahead, assuming we are in a 'Trump Lite' world, we expect the labour market to tighten faster than investors currently anticipate, pushing US inflation, US interest rates and the dollar even higher.

Italy referendum

- Concerns about Italy's constitutional referendum and its implications are weighing on markets. They are right to be concerned.

- If the outcome results in another economic downturn, causing sovereign bond yields to spike, it could prove to be the straw that broke the camel's back, triggering a banking crisis and eventually Italy's exit from the euro area.

- In giving future governments - including Italy's increasingly popular anti-euro Five Star Movement party - greater power, a vote for change in Sunday's referendum risks facilitating that process.

- For that reason, against consensus, we believe that the biggest threat to Italy's future within the euro area is a "yes" vote in this weekend's referendum.

COT Report

Recent CFTC data doesn't bring something really new to analysis. WE could make two major conclusions. First is net speculative short position stands rather far from the bottom and form this point of view, EUR has pretty much room to drop more. Second - during last 3 weeks approximately equal amount shorts and longs were opened, as net position has not changed while open interest has increased slightly. That's why EUR keeps moderately bearish sentiment by far:

Technical
Monthly
As EUR stands in tight range for whole week - long-term charts barely have changed...

Right now we know that fundamental background mostly looks bearish for EUR - Potentially more hawkish Fed policy, Italy referendum surpising result and ECB QE prolongation.

Currently EUR stands at rather strong wide support area. This is lower border of downward channel and all-time 5/8 Fib support. Here EUR has formed Butterfly "buy" and it has reached first 1.27 extension. Probably it needs some time to pass through this level and supportive fundamental background of US strength that finally are coming probably.

EUR is forming typical reversal candle in May. Price has moved above April top and closed below April's lows. It could not get extended continuation, but usually market shows downward continuation within next 1-3 candles. Sometimes reversal candles lead to collapse, as it was on EUR around 1.40 area. Thrust down has started particularly by reversal candle in March 2014.

Speaking on big scale bearish signs, we have these ones:
EUR was not able to reach YPR1 and returned right back down to YPP. Following this logic next destination could be YPS1 right around parity and 1.618 butterfly target. This is just another destination point that we have here, as EUR has dropped through YPP.

Appearing of reversal candle brings nothing good to bulls. Currently we can't precisely forecast the consequences of its appearing, but even minor results will bring some months of downward action inside current 1.04 -1.15 consolidation... Although potential bearish impact could be even stronger.

Finally we have another bearish sign that looks like bearish dynamic pressure. Take a look that although trend holds bullish - market shows inablitity to move up, even from strong support area. Next strong support stands precisely at parity and will become a culmination of downward action, since this level includes support line, YPS1 and butterfly 1.618 target. Brexit results hardly will bring prosperity to EU and probably will become another bearish driving factor for EUR. We aleardy see consequences of Brexit on GBP, so, some negative impact on EUR also will happen, this is just a question of time.

Also take a look at different behavior near low border of channel. Previously when market has touched it - it shows immediate upside pullback, it was V-shape reversal. Right now behavior is absolutely different, price just hangs on the border and shows no upside action. Any tight consolidation near trendline could become a sign of coming breakout.

Thus, based on monthly chart we could make two major conclusions. First is - real bullish trend will be re-established only when EUR will erase reversal candle and overcome its top above 1.16. EUR has not broken through 1.04 lows yet, but probably this will happen very soon. Our next target on Monthly chart is parity - 1.618 Butterfly extension, YPS1 and trendline support.
It is especially interesting will be price action in relation to YPS1. Breaking it down will mean that long term bearish trend could continue in 2017.

Weekly

Here, guys, as you can see - nothing has changed drastically, as week has very small range.

Weekly chart also shows bearish action. Downward action has accelerated and EUR almost has reached important 1.04 lows. Here we have two major patterns - AB=CD and Butterfly.

Here we can track market action step by step. First EUR has reached 0.618 extension and shown reasonable bounce that coincided with elections by the way. Now it is turned to extension mode and going to next one - AB=CD @ 1.04.

Most important thing with this target is its standing below previous lows around 1.0530. It means that market should get acceleration down as soon as it will break though it. And this will be bad day for those traders who will make bet on 1.04 lows support and expect upside bounce there. These lows are doomed.

This in turn, could lead EUR right to completion of 1.27 Butterfly around 1.01 and minor AB-CD 1.618 extension. Probably they will be reached simultaneously. Right now these targets stand below oversold and not as interesting as nearest one.
Currently, guys two major events that could become a drivers for the drop and first one is Italy referendum. Although we speak on some medium-term perspectives, but it could happen that EUR will open on Monday with gap down, depending what people will say tomorrow...
Second driver is 8th of December - last 2016 ECB meeting.

Daily

So, last week EUR was not able to leave "high wave" pattern range, even after NFP release. This fact keeps valid bearish grabber here and makes perspectives of immediate upside retracement phantom. Guys, although theoretically overall picture looks promising, say, for DRPO "Buy" pattern, but existing of deadly combination of untouched 1.04 AB=CD weekly target, abscence of any strong support and oversold and anemic heavy price action significantly diminish chances on any meaningful retracement right now. They area issues beyond what we have said above - Italy and ECB...
Also we see some irrational behavior on intraday charts that is not really typical for bullish market. That's why we could continue to watch for DRPO here, but definitely we should not take any long position until it will be formed.

Intraday

If we will not get any shock on Italy voting on Sunday, short term analysis suggests two issues. First and the major one - the shape of current action difinitely is not a reversal. It is too slow, choppy and gradual. This is just minor short-term pause before downward continuation. EUR looks really weak, as it can't even pass through nearest minor 3/8 FIb resistance within 2 weeks...
Second issue - as we have puny bullish grabber here, on 4-hour chart, it suggests that before downward continuation, market still could show some upside continuation, take out recent tops and may be reach closest 50% Fib resistance (not shown here), the favorite EUR level:

Our H&S pattern absolutely has lost its shape and now this is just a sequence of fluctuations that mostly reminds channel as it is shown above rather than H&S pattern. Still, as result of grabber - EUR could complete our AB=CD pattern by forming butterfly "Sell" right at top:

But, anyway, whatever minor upside action to 1.0730 area will happen or not - overall view stands the same and current market behavior tells about retracement type of action that suggest further downward continuation.

Conclusion:

We still keep the same long-term view on EUR and it looks bearish. Our next long-term target stands around parity.
On a way down we will have some intermediate targets as well, and next one stands around 1.04 area. We expect that downward action should continue soon as current price behavior doesn't have any upside impulse and mostly typical for retracement type of action.

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.

 

[Sive Morten]

Good morning,

(Reuters) - The euro steadied on Tuesday, having bounced from a near 21-month low set the previous day after Italian Prime Minister Matteo Renzi's loss in a referendum over constitutional reform, an outcome that traders had widely expected.

Renzi announced on Monday that he would resign after the resounding defeat in the referendum.

Still, while Renzi's resignation could open the door to an early election next year and the possibility of the anti-euro 5-Star Movement gaining power, many investors and analysts think it more likely that a caretaker government will be put in place until an election in 2018.

The euro eased 0.1 percent to $1.0757. On Monday, it ended up gaining 1 percent on the day, having bounced from a low of $1.0505 set in Monday's early Asian trade.

Analysts said the euro was buoyed by relief over the lack of any immediate sign Italy would head toward an early election after Renzi's resignation.

However, they warned that the euro's outlook remains clouded by worries over political risks in Europe, with elections coming in the Netherlands, France and Germany next year.

"The euro has bounced due to a short-squeeze, but this doesn't mean that it has entered a rising trend," said Masashi Murata, currency strategist for Brown Brothers Harriman in Tokyo.

"I think it's reasonable to stay with the view that it will eventually head lower, to levels below $1.05," Murata added.

In the near-term, the euro could be supported by investor caution ahead of the European Central Bank's policy meeting on Thursday, analysts said.

While the ECB is seen likely to announce an extension of its quantitative easing (QE) programme, one uncertainty is whether it will send any signals about a possible tapering of its asset purchases, said Sim Moh Siong, FX strategist for Bank of Singapore.

"If they do signal a tapering, then perhaps that would cancel out the impact of extending the QE," Sim said, adding that market participants may be reluctant to make bearish bets against the euro now because of this risk.

At the Dec. 8 meeting, the ECB is expected to extend its QE programme by six months and keep the size of monthly asset purchases unchanged, according to a majority of economists polled by Reuters.

The dollar was little changed against a basket of six major currencies at 100.16, not far from Monday's low of 99.849, its lowest level since Nov. 15.

"The market seems to be hoping for the best, and I think some of these expectations need to be validated before we see further dollar strength," said Bank of Singapore's Sim, referring to the hopes for increased U.S. fiscal stimulus.

Against the yen, the dollar held steady at 113.79.

The Australian dollar was weighed down after the Reserve Bank of Australia kept interest rates unchanged but sounded cautious on economic growth.

The Aussie was last down 0.2 percent on the day at $0.7460.
In late November, the dollar index had set a 13-1/2 year high of 102.05, having rallied as U.S. bond yields surged on expectations of higher fiscal spending and a faster pace of Federal Reserve monetary tightening under President-elect Donald Trump.

Today guys, we will take a look at specific currency - CHF. Previously it was among most discussed currencies, but when SNB has put limit on its appreciation, investors mostly has lost interest to active trading.
Still, our setup is mostly tactical and it will not be hurted by larger time scale. To be honest first I've waited for the same pattern on JPY and may be we will get it, but not now. On CHF instead it already has been confirmed and even has started to work. This is DRPO "Sell" Pattern. Minimum target of this pattern stands around 0.9880:

Franc has not tested yet MPP as well, so this will be another technical driver for downward direciton...

On 4-hour chart we do not have any specific pattern, except, may be, sideways action. The only target that we could estimate here is a width of the range. If we will count it down, we will get an area around MPP. . DRPO target stands slightly lower.

Also guys, I have to remind you that DRPO is 2-edged sword, because DRPO "Failure" is not just cancelling of direct pattern, but it is isolated opposite directional pattern. So every time when you're dealing with DRPO, keep in mind this. It is not simple to trade DRPO's as it seems at first glance.

 

[Sive Morten]

Good morning,

(Reuters) - he euro and dollar drifted sideways early on Wednesday as a wait-and-see mood prevailed ahead of Thursday's European Central Bank policy meeting, which may set the tone in a post-Trump rally currency market.

The euro was little changed at $1.0719 after slipping 0.5 percent overnight.

The common currency had slumped on Monday to $1.0505, its lowest since March 2015, in a knee-jerk reaction after Italian Prime Minister Matteo Renzi lost a referendum on constitutional reform.

It quickly pulled back to a 3-week high of $1.0797 as a worst-case political scenario for Rome appeared to have been averted for the time being.

The dollar was steady at 113.990 yen after inching up about 0.2 percent overnight following a modest rise in U.S. bond yields. It was still some distance from the week's high of 114.775 touched on Monday.

"There are not many factors for the market to trade on ahead of Thursday's ECB meeting, which remains the week's focal point," said Junichi Ishikawa, senior FX strategist at IG Securities in Tokyo.

"Of biggest interest for currencies is whether the ECB will hint at policy tapering. It could spell the beginning of the end of the Trump rally if the ECB does provide such a hint."

The euro was boosted last Friday by news that the ECB, while possibly extending its bond purchases beyond next March, may consider sending a formal signal that the asset purchase program will eventually end.

Elsewhere, commodity-linked currencies like the Canadian dollar sagged in the wake of retreating oil prices.

The Canadian dollar ended a three-day winning run to end lower overnight and last traded little changed at C$1.3276 per dollar.

Canada's loonie had surged to a 6-week high of C$1.3236 per dollar on Monday as oil prices surged after OPEC forged a deal last week to cut output.

The Australian dollar was up 0.1 percent at $0.7471 , paring losses suffered the previous day after the Reserve Bank of Australia kept rates on hold but took a cautious view on economic growth.

Today guys, we will talk on EUR perspectives, or better to say on perspectives of current retracement. On daily chart we have DRPO "Buy" look-alike pattern. Although it doesn't match to strict rules, it is DRPO by nature and market mechanics. Watch today's video for details, there I've explained this idea..
That's being, said, as we treat it as DRPO "Buy" LAL pattern, we will be watching for its potential target around 1.09. Right now EUR behavior shows no signs of weakness or collapse and it keeps chances to reach 1.09. Besides, tomorrow ECB meeting that will be important and could bring more volatility:

Retracement that is started here looks absolutely reasonable, as EUR has reached 4-hour K-resistance and MPP. This is normal reaction:

Although it could drop a bit more, to 1.0650 area, since here we have Fib levels, natural support, but it is undesirable further drop. If EUR will drop below 1.0650 it will significantly diminish chances to proceed right to 1.09 area.

That's being said, first - we're watching for retracement down on hourly chart, whether EUR will hold above 1.0650 or not. If it will, then 1.09 level becomes possible. But, guys, just to remind you - whatever upward action will happen, either EUR will reach 1.09 or it will drop below 1.0650. All these action is just a retracement before further drop, since major AB=CD target @ 1.04 stands untouched yet. No truth reversal will happen until EUR will not complete this target.
It means that although short-term sentiment could be bullish and may be EUR indeed will hit 1.09 but this will be just good chance to sell this rally...

 

[Sive Morten]

Good morning,

(Reuters) The euro edged up and traded near a three-week high against the dollar on Thursday ahead of a European Central Bank policy decision, as the greenback lost momentum from the recent pull-back in U.S. bond yields.

The euro has been the main focus for traders this week after Italian Prime Minister Matteo Renzi said he would resign after a stinging defeat in a referendum on constitutional reform.

After initially dropping on the referendum news, the euro rallied strongly on Monday and has since held below three-week highs against the dollar as investors wait on the ECB.

The ECB is expected to announce a six-month extension to its quantitative easing program on Thursday, while keeping the size of asset purchases unchanged at 80 billion euros, according to a majority of economists polled by Reuters.

"Markets are already expecting the ECB to extend its quantitative easing beyond next March," said Yukio Ishizuki, FX strategist at Daiwa Securities in Tokyo.

"The euro is less likely to fall, because bets against the euro have piled up and investors have tended to buy back the currency after the Italian referendum," Ishizuki added.

The euro edged up 0.2 percent to $1.0776 trading within sight of Monday's peak of $1.0797, its highest level since Nov. 15.

On Monday, the euro had initially slumped to $1.0505, its lowest since March 2015 in a knee-jerk reaction to the outcome of the Italian referendum.

Emphasizing abundant risk, including from forthcoming elections in Europe, ECB President Mario Draghi is expected to argue that premature tapering - or slowly ending - bond-buying could abort a still timid recovery, unraveling the impact of the purchasing program.

Moody's changed its outlook on the country's bond rating to negative from stable, underscoring the financial risks that heavily indebted Italy faces, saying prospects for much-needed economic reform had diminished after Italians rejected Renzi's proposals to revise the constitution and streamline parliament.

While the market remains concerned about the risk of an early election being called in Italy, the immediate focus was on the ECB meeting, said Shinichiro Kadota, senior FX strategist for Barclays in Tokyo.

"I think the market will reassess the situation after seeing what comes out of the ECB," Kadota said.

The dollar index .DXY =USD, which measures the greenback against a basket of six major currencies, stood at 100.02, back near a three-week low of 99.85 set on Monday.

The dollar has lost some momentum after U.S. bond yields declined from their recent peaks. The 10-year Treasury yield now at 2.345 percent US10YT=RR, down from a 1-1/2 year high of 2.492 percent set on Dec.
1st.

The dollar fell 0.3 percent to 113.41 yen. JPY=

Gains in equities and an improvement in risk appetite helped lift the New Zealand dollar, bolstered by upbeat comments on the economic outlook from the Reserve Bank of New Zealand.

The New Zealand dollar rose 0.6 percent to $0.7207. It touched a high of $0.7223 at one point, its strongest level in about a month.

There was limited market reaction to Chinese trade data, which showed that China's November dollar-denominated exports unexpectedly rose by 0.1 percent from a year earlier while imports expanded 6.7 percent.

The Australian dollar was up 0.2 percent on the day at $0.7495 .

Today, guys, we will talk on JPY, as we have nothing new to say on EUR, so let's just wait results of ECB meeting.

On JPY we have new inputs for our scenario. Last week we've made a suggestion that JPY could should minor bounce down on weekly chart as it stands at strong resistance - Major Fib level, OB and AB-CD target. This combination generates two directional patterns - DiNapoli "Stretch" and "Kibby trade". But both of them have similar nature and suggest downward retracement:

On daily chart this bounce could take the shape of DRPO "Sell" pattern. But right now it is not confirmed yet. We have only first close below 3x3 DMA yesterday. Now we need close above it, and then 2nd close below to confirm this pattern. Minimum target of DRPO stands at 50% level of the thrust @ 1.08 area:

DRPO Top, in turn, could take a shape of H&S pattern on 4-hour chart. Now we have only first part of it in place and market is coiling with head. It seems that best point for potential enter here is the top of right shoulder. First is because most part of H&S will done and we will see it better. Second - DRPO should be confirmed at this moment already, and it will be just safer way to take a position than trying to run ahead of train right now...

That's being said, JPY setup potentially is interesting, we need just to wait a bit to get better signs that our suggestions are correct...

 

[Sive Morten]

Good morning,

(Reuters) The dollar rose broadly on Friday as U.S. bond yields rose, while the euro sank after the European Central Bank's decision to extend its debt-buying program even as it cut the size of its purchases disappointed currency bulls.

The dollar index gained 0.1 percent to 101.230 .DXY following an overnight rise of nearly 1 percent. It was on track to gain 0.3 percent this week.

The greenback was up 0.4 percent at 114.430 yen coming within the reach of a 10-month high of 114.830 set last week.

The yen's safe-haven appeal has diminished as Japan's Nikkei hit a one-year peak as Wall Street reached a record high.

The widening of U.S.-Japan interest rate differentials also supported the dollar, with the benchmark 10-year Treasury note yield rising to 2.445 percent

The Treasury yield edged back toward a 1-1/2-year peak of 2.492 percent scaled last week following a rise in euro zone debt yields overnight.

Long-dated euro zone bond yields rose and the euro fell on Thursday after the ECB said it would reduce its monthly asset buys to 60 billion euros as of April, from the current 80 billion euros, but as it also opted to extend bond purchases to December from March.

The ECB expanded what it could buy to shorter-dated paper and also reserved the right to raise the purchase amounts should the economic outlook sour.

"The reduction in purchases initially came as a surprise to the market as we first thought it was policy tapering," said Ayako Sera, market economist at Sumitomo Mitsui Trust Bank in Tokyo.

"But ECB showed after all that it is willing to ease for a longer term, expanding what it could buy."

The euro dropped 0.2 percent to $1.05920 after falling 1.3 percent overnight, the biggest intraday loss since late June.

It had briefly risen to a near 1-month peak of $1.0875 on Thursday in an initial reaction to the ECB before pulling back as the markets concluded that more significant policy tapering remained further down the horizon.

"The drop in short-end German bund yields following the ECB announcement dragged down the euro by widening the spread with U.S. yields," said Shin Kadota, chief Japan FX strategist at Barclays in Tokyo.

"It was not just the perceived lack of a strong tapering message, but such technical factors also weighed on the euro."

The 2-year German bund yield sank on Thursday while the 10-year bund yield rose as long-dated debt were sold on the ECB's decision to reduce the buying amount while widening the overall maturity range of its purchases.

There is no doubt that ECB monetary policy is firmly focused on securing a recovery in inflation toward target and, whilst not a policy tool, a weaker exchange rate would be helpful in that regard. Our forecasts assume that EUR/USD will move toward parity in coming months," wrote Brian Martin, head of global economics at ANZ.

With the ECB meeting out of the way, attention has turned to the Federal Reserve.

The possibility of the Fed hiking interest rates next week has been almost fully priced in by the market, and the focus is now on whether the central bank hints at further monetary tightening in 2017.

Sera at Sumitomo Mitsui Trust Bank said that the markets' focus will also shift to politics as EU leaders gather for the European Council next week.

The Australian dollar dipped 0.1 percent to $0.7452 against a broadly higher dollar. The New Zealand dollar was steady at $0.7173.


So, major event on EUR has happened, ECB has decided to extend its QE programme till December 2017, but slightly reduce amount to 60 Bln per month. This decision mostly stands in a row with our long-term view of further EUR weakness and we expect downward continuation in medium-term perspective.
On daily chart our DRPO mostly has been completed, EUR has not reached 1.09 level just for few pips and this has happened mostly due existance of daily OB level on a way to 1.09.
Last session has become huge reversal day and now we again can think about short entry. Our next target stands at 1.04. It is interesting that 1.04 also is 1.27 extension of recent retracement. That's why, who knows, may be EUR will form butterfly here. Because butterfly seems logical right at final point of AB=CD weekly pattern.

On hourly chart upside spike has finalized butterfly pattern. After that EUR has collapsed right to ultimate butterfly target and WPS1. Today probably we could get upside retracement as traders will take porfit and get some relief after yesterday tough session. Most probable destination stands around 1.07 - Fib level, recent lows and WPR1. This upside action seems logical, if we suggest appearing of butterfly on daily chart:

 

[exclass]

Thank you very much Sive. I hope you keep contributing with your analysis as long as possible and never retire.

 

[RahmanSL]

Sive, thanks again for your valuable insights and views which makes me that much more prepared for another trading week.
I have and is still specifically trading the USD/CAD pair for almost two months now.
Based your analysis, I might take a couple shorts on the EUR/USD at the 1.0730 levels when and if that happens because most major events for this month is slated for a bearish EUR/USD.
That Italy referendum this Sunday will set the pace in which direction the Euro will go.

Cheers buddy and all the best!

 

[Joh]

Superb report Sive as usual, we are lucky to have you gude us

 

[csc2009]

Valuable insight indeed, Sive. I fully agree with your view on Dollar.

 

[ochills]

Thank you very much Sive. I hope you keep contributing with your analysis as long as possible and never retire.

Amen. I wish Commander in pips will never retire. but unfortunately I had accepted the bitter truth, that in LIFE FOR EVERY BEGINNING, THERE IS AN END. So one day Sive might not be with us to provide this priceless analysis for us all but we must learn as much as we can now and as fast as possible and possibly have his contact so that we can friend him almost forever.