Sive Morten
Special Consultant to the FPA
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EUR/USD Daily Update, Wed 04, January, 2012
Good morning,
Today I've tried to take a fresh look at daily picture, and found that I'm not so sure that daily retracement has not started yet.
The reason for that is some moments:
1. If you will take as "A" point of initial AB-CD pattern on daily time frame second candle, from which move has really started - you will find that 1.618 extension has bit hit;
2. Current price action with recent butterfly also could be treated as W&R, especially if we will take into consideration that trend has held bullish during new low appearing.
These are bullish signs, that very often lead to reversal or at least appear in the beginning of some move to the upside.
The one thing that still holds me on thought about appearing of new low is weekly AB-CD incompletement. Even If you will take as "a" also another candle - the target will move 20 pips higher, but it still has not been reached.
Now, we see that market has reached crucial area - 0.618 resistance, pivot resistance 1 and AB=CD target on hourly time frame.
Still, 1.618 target has not been reached yet.
Today our major task is to watch for price action - if market will break this area and hold above it, then it will mean that bears have a problem - this is not natural development for bear trend, especially right above significant target.
If market will form some reversal pattern, say, Butterfly, and hit 1.618 extension on hourly chart, this may be could lead to real reversal.
Anyway conservative approach is to enter short only when market will move below pivot point. Although you may try to take some reversal pattern around this area - it will not be absolutely safe, but if you will right - your entry point will be much better as risk/reward ratio.
So, choice is up to you
Good morning,
Today I've tried to take a fresh look at daily picture, and found that I'm not so sure that daily retracement has not started yet.
The reason for that is some moments:
1. If you will take as "A" point of initial AB-CD pattern on daily time frame second candle, from which move has really started - you will find that 1.618 extension has bit hit;
2. Current price action with recent butterfly also could be treated as W&R, especially if we will take into consideration that trend has held bullish during new low appearing.
These are bullish signs, that very often lead to reversal or at least appear in the beginning of some move to the upside.
The one thing that still holds me on thought about appearing of new low is weekly AB-CD incompletement. Even If you will take as "a" also another candle - the target will move 20 pips higher, but it still has not been reached.
Now, we see that market has reached crucial area - 0.618 resistance, pivot resistance 1 and AB=CD target on hourly time frame.
Still, 1.618 target has not been reached yet.
Today our major task is to watch for price action - if market will break this area and hold above it, then it will mean that bears have a problem - this is not natural development for bear trend, especially right above significant target.
If market will form some reversal pattern, say, Butterfly, and hit 1.618 extension on hourly chart, this may be could lead to real reversal.
Anyway conservative approach is to enter short only when market will move below pivot point. Although you may try to take some reversal pattern around this area - it will not be absolutely safe, but if you will right - your entry point will be much better as risk/reward ratio.
So, choice is up to you