Forex FOREX PRO WEEKLY, June 03 - 07, 2024

[Sive Morten]

Morning everybody,

So, our EUR plan is working by far. Market is trying to stay above 1.0850 area, showing just minor pullback out from the top. Today we've got another bullish point- grabber on daily chart. As MACD trend breakeven level stands very close to the current price - potential long position will have great efficiency level, due to ability to place very tight stop. Just few pips lower and bullish daily context will be destroyed. So, it makes no sense to place too far stops here:

On 4H chart we have no changes - 1.0950-1.0970 is still our next upside target:

Here our 1.0860 has worked perfect, bounce has happened. Now we also have minor retracement that give the 2nd chance for long entry. Stop could be placed under K-support area. As we've said, if EUR will break it down - daily bullish context stops to exist. And we will have to watch for something else...

 

[RahmanSL]

Hi Sive...Wouldn't the crucial European Central Bank (ECB) monetary policy meeting on Thursday will have a major impact on the Euro, especially since it's widely expected that the ECB will cut rates by 25bsp? If that come to pass, wouldn't the Euro fall against other currencies?
The BOC cut rates as expected and that caused the USD/CAD to spike upwards. Likewise, if the ECB cut rates as expected, I would expect the EUR/USD to spike downwards.

 

[Sive Morten]

Hi Sive...Wouldn't the crucial European Central Bank (ECB) monetary policy meeting on Thursday will have a major impact on the Euro, especially since it's widely expected that the ECB will cut rates by 25bsp? If that come to pass, wouldn't the Euro fall against other currencies?
The BOC cut rates as expected and that caused the USD/CAD to spike upwards. Likewise, if the ECB cut rates as expected, I would expect the EUR/USD to spike downwards.

Hi Rahman,
The cut per se hardly will make any impact because it priced-in for a long time already. The major driver will be the comments by Lagarde which should shed light on next cut. If nothing definite will be said a kind of "sometime later...". This could support EUR, because the pressure on the Fed to cut rate is raising, and we do not exclude that they could do this in July. 10-year bonds have dropped already to 4.3%.
Actually we could get effect of "buy rumors sell facts" and EUR could raise instead of dropping...

 

[Sive Morten]

Morning everybody,

We have minimal changes today. Market just waits for ECB meeting. EUR keeps the context that we've discussed yesterday, everything mostly remains the same - grabber in place, price above 1.0860 level:

On 4H chart we have some signs of bullish dynamic pressure - flat price action while MACD shows downside direction.

On 1H chart market stands in the same area, now the price action reminds reverse H&S pattern above K-support. Unfortunately as ECB as NFP stand out of our control, but for now I would say that bullish context remains here:

 

[RahmanSL]

Hi Rahman,
The cut per se hardly will make any impact because it priced-in for a long time already. The major driver will be the comments by Lagarde which should shed light on next cut. If nothing definite will be said a kind of "sometime later...". This could support EUR, because the pressure on the Fed to cut rate is raising, and we do not exclude that they could do this in July. 10-year bonds have dropped already to 4.3%.
Actually we could get effect of "buy rumors sell facts" and EUR could raise instead of dropping...

I did take a couple short positions at the 1.091xx levels. Okay, I'll not mortgage my house, cars, and boat to short the EUR/USD

 

[BeeKay8]

Hi Sive,

Thank you for all your hard work.

I would like to understand the following question to you a bit more. During significant fundamental events like the ones we had today, if a Bullish/Bearish grabber were to appear that is contrary to the overall context (like what we had today on the 4H chart. We had a Bearish grabber but of course, we knew that overall context was bullish, even on the intraday charts if price stayed above 1.0850 area), do we seriously treat the grabber as such? Or do we "lessen" the significance of it due to the increased volatility/human behavior of price action from the major fundamental events?

Thank you.

 

[Sive Morten]

Hi Sive,

Thank you for all your hard work.

I would like to understand the following question to you a bit more. During significant fundamental events like the ones we had today, if a Bullish/Bearish grabber were to appear that is contrary to the overall context (like what we had today on the 4H chart. We had a Bearish grabber but of course, we knew that overall context was bullish, even on the intraday charts if price stayed above 1.0850 area), do we seriously treat the grabber as such? Or do we "lessen" the significance of it due to the increased volatility/human behavior of price action from the major fundamental events?

Thank you.

Hi BeeKay this is excellent question. But your action will depend on a few moments. As a rule higher time frame pattern is more valid than the lower one. From this point of view we should get priority to daily setup. Besides, it is not cancelled yet. And then - "the options" come on stage.

First we need to identify "small pattern" target - whether it will change the daily context or not. In our case, this is lows at 1.0861. So, this pattern could work and not to hurt daily setup.

Second is what you want to do - either you already have long position or you just would like to take it. If you just want to go long - it makes sense to not ignore this pattern and wait when it will be done (either fails or completes the target).
But if you already have the long position - at what time frame do you trade. On daily - you ignore it, because you have stop and t/p at daily (weekly) time frame. If you trade intraday - here is where trader's freedom comes on stage. You could either close or just tight the stop to b/e.

Other words speaking, we do not ignore it, but in every particular case try to find most suitable decision, based on risk/rewards thoughts.

This grabber seems important to me as price action doesn't look as strong as we would like it to see. But today we have NFP. Personally - I would prefer to stay aside or keep it with b/e stop. But other traders who like reports trading could make different decision.

 

[Sive Morten]

Morning everybody,

So, the bulk of today's update I've explained above . Indeed, we've got our upside action, but it was very choppy and not as high as we were counted on. In fact, I would say that EUR goes nowhere, which means that 99% of all Lagarde speech was expected by the market.

On daily chart setup with the grabber remains valid. If you have used it for long entry on weekly/daily basis - you could keep your position with reasonable stop, just keep an eye on NFP numbers today. We have indirect signs that EUR could jump - yields are drifting lower, while DXY is erasing weekly bullish grabber (also moving lower).

But if you do not have any position - maybe it makes sense to wait until the next week and NFP report. At least If you do not intend to trade it of course. Mostly because intraday grabbers that we've got - on 4H and on 1H charts as well.

On 1H chart the same picture. Upward action looks not too strong, so, if any boost will come - it comes from external driver. But today we have only NFP.

Thus, to keep it short - those who have longs with b/e stops taken yesterday, you could try to keep it. Those who don't and you do not want to trade NFP release - wait.

 

[RahmanSL]

Morning everybody,

So, the bulk of today's update I've explained above . Indeed, we've got our upside action, but it was very choppy and not as high as we were counted on. In fact, I would say that EUR goes nowhere, which means that 99% of all Lagarde speech was expected by the market.

On daily chart setup with the grabber remains valid. If you have used it for long entry on weekly/daily basis - you could keep your position with reasonable stop, just keep an eye on NFP numbers today. We have indirect signs that EUR could jump - yields are drifting lower, while DXY is erasing weekly bullish grabber (also moving lower).
View attachment 92684

But if you do not have any position - maybe it makes sense to wait until the next week and NFP report. At least If you do not intend to trade it of course. Mostly because intraday grabbers that we've got - on 4H and on 1H charts as well.
View attachment 92683

On 1H chart the same picture. Upward action looks not too strong, so, if any boost will come - it comes from external driver. But today we have only NFP.
View attachment 92686

Thus, to keep it short - those who have longs with b/e stops taken yesterday, you could try to keep it. Those who don't and you do not want to trade NFP release - wait.

After yesterday's lackluster reaction of the EUR/USD over the expected ECB rate cut and Lagarde's speech, I think the best way to trade the EUR/USD today is to wait for the NFP numbers to be released and then trade with market flow by scalping for all it's worth.