Sive Morten
Special Consultant to the FPA
- Messages
- 18,748
Monthly
On big picture since April bar has closed we have some changes, althgough they are not drastical. Market stands now in some kind of equilibrium or indecision. Two months earlier we’ve got bearish engulfing pattern right at 50% resistance, and theoretically it has target around 1.2450 area and it is still valid. But now we’ve got another one – oposite to the previous one. This pattern coincides with two other rather significant bullish moments. First is trend – it is bullish now, and Yearly Pivot point – market has tested it and now holds above it. This is long-term bullish side. If we suggest even minor upward extension to 0.618 of current AB-CD pattern we will get 1.3775 level – and that is Yearly Pivot Resistance 1.
The major problem with all this patterns is that they have too far invalidation points. Thus, to erase bearish englufing pattern, price has to take out of its highs. Second, bullish engulfing is a bit easier to deal with, since price now stands closer to its low, but still this is around 1.2750 – rather significant distance still. That’s why I offer you compromise. Since minimum target of bullish engulfing is length of its bars – this gives us smaller target – slightly lower than previous highs. By this action market could reach the target of bullish pattern and will not erase larger bearish one. May be it’s better focus on this scenario currently. Because we can’t just enter short and deny bullish trend, engulfing at 50% support, and standing above yearly pivot point. Thus, target of bullish engulfing will stand around 1.3650 area.
Weekly
Although we have bullish pattern on monthly time frame, weekly chart has not confirmed it yet. Here we have potential bearish H&S pattern. Previously we’ve talked a lot about its imperfections – mostly is that it stands somewhere in the middle of action that is not very common for H&S patterns. All these moments are true, but still, to get confidence of market bullishness on weekly chart we will need to see harmony breaking in this H&S pattern anyway. Only if we will see that market has significantly higher right shoulder, or something of that sort – we can speak about possible H&S failure. But right now we do not have any signs of that kind. Even more – market has reached 50% level as we suggested and has turned to reasonable move down, and this in fact could be downward continuation. Also we do not have any other patterns here, but may be on the next week we will get bearish stop grabber. To speak about bullish long-term sentiment, I want to see trend shifting here and significant move above 50% resistance, i.e. breaking the shoulder’s harmony.
Daily
Trend holds bullish here, market is not at oversold, and yes – we have a pattern here. This pattern is quite simple to deal with. Our Friday analysis mostly was pointed on the task to get a confirmation of this pattern, and we’ve got it.
Let’s first discuss upward perspectives. Previously market has hit strong resistance area around 1.3250 and bounce down. Since this was shallow 0.618 extension target, we’ve said that retracement has to be small, since too extended bounce will be unnatural and could indicate end point of upward action. My thought is current retracement down was quite enough. Besides, market stands at 5/8 support on 4-hour chart, MPP, trend line and 1.618 extension target. Also price has formed potentially bullish pattern. All these signs should lead to upward action, EUR still has power and intention to move higher. It means that any deviation from this development, probably, will mean the opposite – re-establishing of downward trend. But do we really have any reasons to worry about it? I think we do.
Do not forget, that we still have in-progress H&S on weekly chart and take a look at current two tops – first one is bearish engulfing, while second is – evening star pattern. These tops could be accompanied by bearish divergence, if trend will shift bearish. That’s the risk. The intrigue of current situation stands in failure point – low of stop grabber is a triggering point of evening star. Thus, market can choose direction very soon.
Still, I think we can try to stick with stop grabber; at least it does not care a lot of risk, even if we will be wrong.
4-hour
Well, guys, I think this kind of support should be sufficient for market that intends to go higher – trend line, K-support and MPP. Actually, as we’ve said on Friday – if market will pass trhough this support – it will erase all bullish signs. That’s why we probably will focus on the most recent swing up of stop grabber. Actually looks like we do not have other scenarios and patterns.
60-min
Well, here is in fact, our working swing. On Monday we should watch for 1.31 level for possible long entry. As usual, we do not want to see fast move down, but gradual move on lower time frames. Another thing that worries me is that WPP stands below current lows.
Conclusion:
Since the long term situation allows price to fluctuate around current levels without breaking patterns that now are forming on monthly and weekly time frames – we will focus on lower time frame setups.
Now situation stands so, that we have as bullish signs as bearish, but what direction will prevail depend on will lows around 1.3020 hold. If yes, then we can see further upward action, at least to previous highs around 1.3250 area. If not, then it could become starting point of continuation medium-term bear trend.
At the same time this 1.3020 point is a low of daily stop grabber pattern. As we have nothing else as clear as this pattern, we probably could focus on its trading. Another advantage of this pattern is that it cares not very significant risk of this trade – about 50-60 pips.
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 since April bar has closed we have some changes, althgough they are not drastical. Market stands now in some kind of equilibrium or indecision. Two months earlier we’ve got bearish engulfing pattern right at 50% resistance, and theoretically it has target around 1.2450 area and it is still valid. But now we’ve got another one – oposite to the previous one. This pattern coincides with two other rather significant bullish moments. First is trend – it is bullish now, and Yearly Pivot point – market has tested it and now holds above it. This is long-term bullish side. If we suggest even minor upward extension to 0.618 of current AB-CD pattern we will get 1.3775 level – and that is Yearly Pivot Resistance 1.
The major problem with all this patterns is that they have too far invalidation points. Thus, to erase bearish englufing pattern, price has to take out of its highs. Second, bullish engulfing is a bit easier to deal with, since price now stands closer to its low, but still this is around 1.2750 – rather significant distance still. That’s why I offer you compromise. Since minimum target of bullish engulfing is length of its bars – this gives us smaller target – slightly lower than previous highs. By this action market could reach the target of bullish pattern and will not erase larger bearish one. May be it’s better focus on this scenario currently. Because we can’t just enter short and deny bullish trend, engulfing at 50% support, and standing above yearly pivot point. Thus, target of bullish engulfing will stand around 1.3650 area.
Weekly
Although we have bullish pattern on monthly time frame, weekly chart has not confirmed it yet. Here we have potential bearish H&S pattern. Previously we’ve talked a lot about its imperfections – mostly is that it stands somewhere in the middle of action that is not very common for H&S patterns. All these moments are true, but still, to get confidence of market bullishness on weekly chart we will need to see harmony breaking in this H&S pattern anyway. Only if we will see that market has significantly higher right shoulder, or something of that sort – we can speak about possible H&S failure. But right now we do not have any signs of that kind. Even more – market has reached 50% level as we suggested and has turned to reasonable move down, and this in fact could be downward continuation. Also we do not have any other patterns here, but may be on the next week we will get bearish stop grabber. To speak about bullish long-term sentiment, I want to see trend shifting here and significant move above 50% resistance, i.e. breaking the shoulder’s harmony.
Daily
Trend holds bullish here, market is not at oversold, and yes – we have a pattern here. This pattern is quite simple to deal with. Our Friday analysis mostly was pointed on the task to get a confirmation of this pattern, and we’ve got it.
Let’s first discuss upward perspectives. Previously market has hit strong resistance area around 1.3250 and bounce down. Since this was shallow 0.618 extension target, we’ve said that retracement has to be small, since too extended bounce will be unnatural and could indicate end point of upward action. My thought is current retracement down was quite enough. Besides, market stands at 5/8 support on 4-hour chart, MPP, trend line and 1.618 extension target. Also price has formed potentially bullish pattern. All these signs should lead to upward action, EUR still has power and intention to move higher. It means that any deviation from this development, probably, will mean the opposite – re-establishing of downward trend. But do we really have any reasons to worry about it? I think we do.
Do not forget, that we still have in-progress H&S on weekly chart and take a look at current two tops – first one is bearish engulfing, while second is – evening star pattern. These tops could be accompanied by bearish divergence, if trend will shift bearish. That’s the risk. The intrigue of current situation stands in failure point – low of stop grabber is a triggering point of evening star. Thus, market can choose direction very soon.
Still, I think we can try to stick with stop grabber; at least it does not care a lot of risk, even if we will be wrong.
4-hour
Well, guys, I think this kind of support should be sufficient for market that intends to go higher – trend line, K-support and MPP. Actually, as we’ve said on Friday – if market will pass trhough this support – it will erase all bullish signs. That’s why we probably will focus on the most recent swing up of stop grabber. Actually looks like we do not have other scenarios and patterns.
60-min
Well, here is in fact, our working swing. On Monday we should watch for 1.31 level for possible long entry. As usual, we do not want to see fast move down, but gradual move on lower time frames. Another thing that worries me is that WPP stands below current lows.
Conclusion:
Since the long term situation allows price to fluctuate around current levels without breaking patterns that now are forming on monthly and weekly time frames – we will focus on lower time frame setups.
Now situation stands so, that we have as bullish signs as bearish, but what direction will prevail depend on will lows around 1.3020 hold. If yes, then we can see further upward action, at least to previous highs around 1.3250 area. If not, then it could become starting point of continuation medium-term bear trend.
At the same time this 1.3020 point is a low of daily stop grabber pattern. As we have nothing else as clear as this pattern, we probably could focus on its trading. Another advantage of this pattern is that it cares not very significant risk of this trade – about 50-60 pips.
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.
