1. This site uses cookies. By continuing to use this site, you are agreeing to our use of cookies. Learn More.

FOREX PRO WEEKLY, November 27 - 01, 2017

Discussion in 'Sive Morten- Currencies and Gold Video Analysis' started by Sive Morten, Nov 25, 2017.

  1. Sive Morten

    Sive Morten Special Consultant to the FPA

    Joined:
    Aug 28, 2009
    Messages:
    10,014
    Likes Received:
    10,826
    Fundamentals

    (Reuters) - The dollar fell to its lowest since late September against a basket of currencies on Friday as investors grew optimistic about the strength of the euro zone’s recovery and lost appetite for the greenback.

    The euro hit its highest since Sept. 25 against the dollar, up 0.65 percent on the day and more than 1 percent for the week. It was the single currency’s third straight week of gains, its best run since July, and second straight 1 percent weekly gain.

    Against the Japanese yen, the euro rose more than 1 percent to 1.3323, its highest since Nov. 16.

    “You had good data (this week) from Europe, pretty good news from Germany and nobody guarding the dollar as we’re all eating turkey,” said John Doyle, director of markets at Tempus Inc in Washington.

    On Thanksgiving Thursday, while markets in the U.S. were closed, euro zone business growth surveys showed surprise growth, supporting the European Central Bank (ECB) move last month to announce a throttling back of its monetary stimulus.

    The currency bloc’s latest Purchasing Managers’ Index (PMI) readings suggest the upturn still has momentum.

    The dollar index fell to its lowest since Sept. 26 at 92.675, having suffered its worst single-day decline in more than five months on Wednesday after minutes from the Federal Reserve’s latest meeting showed some policymakers were concerned about stubbornly weak U.S. inflation.

    For the week, the dollar index fell nearly 1 percent, its worst weekly loss since September.

    Analysts also pointed to developments in Germany, where the Social Democrats appear close to renewing their coalition co-operation with Chancellor Angela Merkel, as providing support to the euro.

    “The euro zone economies are growing smartly,” said Joseph Trevisani, chief market strategist at Worldwide Markets in Woodcliff Lake, New Jersey. “A further reduction or halt to the (ECB‘s) bond purchases is perfectly plausible if growth continues to improve.”

    Minutes from the ECB’s latest policy meeting, released on Thursday, showed policymakers had broadly agreed on extending their quantitative easing scheme, albeit at a lower level, but keeping asset purchases open-ended appeared to generate fiercer debate.

    The euro makes up more than 50 percent of the dollar index’s weight.

    Sterling rose to its highest against the dollar since Oct. 2 as markets interpreted the latest comments from top European Union policymakers as mildly positive for Brexit negotiations.

    The pound pared gains after reports of a shooting on London’s Oxford Street but remained higher on the day at $1.3330. Police later said they had found no evidence of gunfire or casualties in Oxford Street.


    Chart of the Week: Fathom’s UK ESI Remains More Bullish than the Official Data
    by Fathom Consulting

    The Fathom UK Economic Sentiment Indicator (UK ESI), which distils information from numerous consumer and business surveys, nudged up to 0.6% in October. That improvement was driven by just over half of the surveys included within our ESI, although those more confident in October than in September tended to be business-survey respondents, as opposed to consumers.
    [​IMG]

    As the chart above highlights, for much of the year there has been a marked deviation between survey-based measures of economic activity (as captured by our ESI) and official data, particularly in the manufacturing and construction sectors. With that deviation in mind, and with consumers still under assault from falling real wages, October’s ESI reading does little to dissuade us that the UK remains vulnerable to a consumer-led downturn. As our clients are aware, contrary to other consultancies, we do not believe that investment- or export-orientated growth will save the day.

    COT Report

    Today, guys, we will take a look at Cable, as on EUR we mostly have specified everything already and situation there develops without surprises.
    On Cable, guys, situation is very sophisticated. GBP shows very unstable action, because now there are too many driving factors. Fundamentals do not support growth, political background also doesn't bring a lot of positive issues, while BoE still rises rate which provide at least temporal support.
    This explosive combination has led to significant volatility in sentiment on market. Within just 2 months sentiment has changed from strong bullish in September to bearish in October. In the second half of October sentiment again has become lightly bullish. What we have right now? This week we see that some shorts were closed, very small part of. Last week - market has closed longs. So, currently nobody has solid advantage and mostly market stands indecision. Recent shorts covering mostly stands due GBP growth and because price was able to stand above major daily support. But, as you will see in technical part - overall situation is not as clear as it seems on first glance.


    upload_2017-11-25_12-34-8.

    Technicals
    Monthly

    Long term chart barely has changed as last 4-6 weeks market spent in consolidation. In result, as you can see, we have two inside months - October and November.

    So, long-term view for GBP is not really positive. Fundamental picture points on structural problems in economy, while very long-term technical analysis suggests 1.12 target. But right now, as market stands in upside action - we're mostly interested with its perspectives.

    Trend is bullish here and there are some moments that we should take care on. First is uncompleted AB-CD target around 1.1650 area. Market has turned up just 350 pips above it, which is small distance for monthly scale. When such turning happens, this creates friable background of upside action. In fact, you never know where precisely market could stepped out and start dropping again, tending to uncompleted target. The same situation we have here. The nature of price action definitely shows that this is not a trend - too many overlapping candles, long shadows and no thrusting action.

    If we will take a look at reasons for this action, from technical point of view we will find nothing but 0.618 target of all time AB-CD pattern. No Fib supports, Pivots, OB/OS levels, nothing more. Taking it all together, it seems that upside action should not be too extended. Usually market shows either small reaction on minor target or sometimes no reaction at all. This leads us to second issue.

    As market is not at OB right now, it seems that nearest upside target stands around 1.3860-1.3975 K-resistance here. Obviously, this is rather strong resistance cluster as we have YPR1 and OB levels slightly higher, around 1.42 area.

    Also this is previous very important monthly lows. But they point on rather wide range of 1.36-1.42 area.

    That's being said, combined all tools that we have here right now, we could say that cable could turn down at any point of 1.36-1.42 area. But as we have K-resistance, we suggest that retracement market should not break it and this lets us to narrow range a bit to 1.36-1.40 probably.

    Situation on monthly chart obliges us to be careful for any signs of bearish reversal on lower time frames.
    gbp_m_27_11_17.

    Weekly

    Here we will dig candles details, as they keep key details for understanding of situation.
    Take a look that market forms similar retracement harmonic swings. Last swing was a bit faster than previous ones, but take a look what has happened after it has been formed - price has started upside action. Second attempt to go down - has not led to new low, so harmonic swing was confirmed.

    What is more important - market has formed bullish grabber. Although its lows were slightly penetrated (for 30 pips), but I think that it is still valid. And now price turns to upside action.

    It means that here we could smell Gartley patterns. It should be either "222" Sell, or butterfly. But both of them are bearish reversal patterns, and it means that downside turn could happen really soon.

    Butterfly potential targets stands precisely around monthly K-resistance. Thus, our suggestion on possible bearish reversal around it could be correct.
    gbp_w_27_11_17.

    Daily

    So, guys, our job within 1-2 weeks probably will be to catch correct reversal pattern. Although above we've said that it will be either "222" or butterfly, but as you will see from picture below - "222" also could be different.
    In fact, now we already have "222" Sell" been formed:
    gbp_d_27_11_17.

    GBP has completed large AB=CD action. CD leg is rather flat. Also market has come closer to major Fib resistance level. Still, we also have minor ab-cd and its target has not been completed slightly. Around 1.3380 - 1.34 there will be first attempt to go short.
    Although I still think that cable could move slightly higher, to 1.3550 AB-CD 1.618 target, and this also will be "222" Sell, but nevertheless this attempt to short cable could be not bad for short-term intraday trade, and at least minor respect of daily resistance should happen.
    Besides, you never know in advance when market will turn down when you have some options.
    By relative analysis, we could suggest higher action - because we wait upside continuation on EUR, at least to 1.20 or even slightly higher, and we have potential grabber on weekly chart here. But they do not contradict to each other - you could make scalp trade here and then watch for continuation on daily chart.

    So, I do not call to trade it obligatorily, but this is also setup... Besides, if, indeed GBP will turn down right from here - there will be other confirmation signs and you could enter later.

    Finally, here we have another important moment - cable has erased potential butterfly "Buy" as price climbs above 1.3340 top.

    Intraday

    Here we will discuss, how we could play GBP bearish setup. This chart shows that we have not just AB-CD target but also butterfly "Sell". They point area where we could go short - 1.3375-1.34. Both targets coincide with daily 5/8 Fib level and larger daily AB=CD target @1.3350 . Thus, combination looks sufficient to trigger at least minor response. This should be enough to move stops to breakeven.

    Minimum target that probably should be achieved is re-testing of upper border of triangle that has been broken. It stands around 1.3280 area. That's approximately trading setup that we could watch for.

    If market will drop back inside triangle - this will be bearish sign, and you could keep position. it is also will be signal for "careful" conservative traders that market could drop more.

    If price will hold above triangle - that will be sign that it could go to next upside target to form larger "222" pattern. In this case this scalp short trade will be over.
    gbp_4h_27_11_17.

    In general guys, this is a common thing when you expect reversal, but do not know exactly which pattern will trigger it, as you have 2-3 scenarios. So, our task is try to find relatively safe way to take part in all scenarios, and finally possess ourselves for big collapse here...

    Conclusion:
    Our analysis shows that potential reversal could happen within 1-2 months and now market could form three different patterns that potentially could trigger it.

    Our task is to find way to take part in all of them, just to not miss major reversal. And do it as safer as possible.

    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.
     
  2. Lolly Tripathy

    Lolly Tripathy Master Sergeant

    Joined:
    Jul 23, 2010
    Messages:
    442
    Likes Received:
    151
    Very nice job dear sive sir as usual..
     
  3. Synchronicity

    Synchronicity Sergeant

    Joined:
    Apr 28, 2009
    Messages:
    158
    Likes Received:
    52
    Hi Sive

    I didn't realise that the bar you show on the weekly chart was still a valid stop-grabber. I thought that the fact the price had closed below the MACD Predictor would invalidate the SG -is that not the case?

    All the best

    Michael
     
  4. Sive Morten

    Sive Morten Special Consultant to the FPA

    Joined:
    Aug 28, 2009
    Messages:
    10,014
    Likes Received:
    10,826
    Hi, Michael,
    not quite. When grabber has been formed - MACDP doesn't matter, only the lows of grabber. If market will close below them - this is a sign of destruction of grabber. But sometimes I saw that grabber survives even after shy penetration of its lows. I think on cable now we have this case...
     
  5. greaseball

    greaseball Recruit

    Joined:
    Sep 25, 2014
    Messages:
    13
    Likes Received:
    2
    BTCUSDH4.

    Hey Guys,

    I thought id share this chart for anyone interested in BTC/USD 4H. There seems to be an attractive looking 3 drive reversal which looks very good technically. What do you think Sive?

    There is also WPR1 and DPR1 in this zone.
     
    #5 greaseball, Nov 25, 2017
    Last edited: Nov 25, 2017
    Lolly Tripathy likes this.
  6. RahmanSL

    RahmanSL Major

    Joined:
    Jan 16, 2010
    Messages:
    2,444
    Likes Received:
    170
    Sive your analysis is most insightful as ever and, yes, fundamentally the GBP has many uncertain political & economic issues & challenges to push it lower in the months ahead.

    On my normal trading account, I have been trading exclusively on EUR/USD (until the next FED's rate hike) and so have not been paying much attention to other currency pair.

    However, after reading your above and concurring with your analysis, I will have a short pending order on GBP/USD at 1.3550

    Thanks again and all the best!
     
  7. Sive Morten

    Sive Morten Special Consultant to the FPA

    Joined:
    Aug 28, 2009
    Messages:
    10,014
    Likes Received:
    10,826
    Hi buddy, BTC indeed is interesting tool. To answer more definitely, we need to take a look at higher time frames as well. Recent action is a bit flat for 3-Drive... this kind of action is more typical for channels.
     
    DevTrader likes this.
  8. DevTrader

    DevTrader Private, 1st Class

    Joined:
    Jul 19, 2011
    Messages:
    56
    Likes Received:
    19
    BTC is more speculation than technical. you can apply theory but it’s most unpredictable pair and retails participants is keep increasing due to attractive volatility.
    Any move of 5-10% in a day is very normal so just keep your eye open any trade only if you appetite of 10%or more against you.
    I trade in this pair at min qty with longer view as all dips are currently buy may be due to expectation of 10k psychological mark.
     
    Sive Morten likes this.
  9. robertukas98

    robertukas98 Recruit

    Joined:
    Feb 7, 2011
    Messages:
    3
    Likes Received:
    2
    Thank you Sive!
     
    Sive Morten likes this.
  10. Lolly Tripathy

    Lolly Tripathy Master Sergeant

    Joined:
    Jul 23, 2010
    Messages:
    442
    Likes Received:
    151
    Making good profit with gbp as sive sir analysis..
    Thanks a million my dear sive sir
     

Share This Page