EUR Forex Pro Weekly 28-02 July, 2010

[Sentinel]

Fundamentals
Weekly
The green line on the chart is a 3x3 SMA. As you see, we a have an excellent thrust down on the weekly chart, and market has closed above 3x3, but it has not reached a Fib support yet. This combination leads us to two possible trading ideas. First one is Bread & butter “Sell”, second – Double Repo “Buy”.

I am following the market and your analysis with a time lag lately due to my busy schedule. I think there is a third option : A Daily DeRepo down yesterday and I think it will work. Sorry that I missed it.

 

[Sive Morten]

I am following the market and your analysis with a time lag lately due to my busy schedule. I think there is a third option : A Daily DeRepo down yesterday and I think it will work. Sorry that I missed it.

Hi, Sentinel,
Personally, I do not classify this up move on daily as a thrust that is acceptable for DRPO classification - too few bars, poor thrust for me. But it's a personal stuff.

 

[Allen Bailey]

Thanks Sive for your invaluable information.

Al

 

[Sive Morten]

EUR/USD Update, Thu 01, July

Good' ay everybody

Really nothing to add to yesterday's update. Price action was a bit sloppy, but in a small range. I do not attach any chart, because it almost the same as yesterday.
I think that market should reach an OP=1.2143 and possibly 1.2100 area before it will turn up. So, I'll be waiting for this moment.
Besides, NFP release tomorrow, anything can happen. I will not enter market right now.

 

[Rubin Hood]

RRT?

I wonder if this nice long daily bar would qualify as the first side of a railroad track? I know it's not ideal (not long enough) but it *is* quite tall compared to the previous bars, and everybody is guessing in the forex world how the EUR exploded so high today.

If there's no answer on Friday, it may just come back down just as fast.

One interesting explanation I read was quite bearish:
EUR Surging As Banks Scramble To Cover Liquidity Needs With 30 Day Euro Repos Hitting One Year Highs | zero hedge

Someone said that the same thing happened around the time when the Financial Crisis started to get serious: http://www.forexlive.com/116714/all/forexlive-asian-market-open-if-in-doubt-square-up

Are these articles relevant argument? I'd love to know your thoughts, Sive!

How high do you think the EUR could realistically go before turning back down?

Thanks!

 

[Mandrake]

Hey Rubin, I was also wondering what happened yesterday. There was news about ECB saying the banks are very healthy and stuff much earlier in the day but didn't see much movement. I left and came back many hours later and it already flew past 1.24. I tell you, my face turned green man. I couldn't believe I missed this huge move. I thought the market is gonna be very erractic as it usually is before NFP.

I also see the long bar in the daily I would consider this a railroad track if today closes down just as long. But right now it looks more a B&B to me.

Awaiting for Sive's thought on this.

 

[Sive Morten]

Friday update and response to Rubin's post

I wonder if this nice long daily bar would qualify as the first side of a railroad track? I know it's not ideal (not long enough) but it *is* quite tall compared to the previous bars, and everybody is guessing in the forex world how the EUR exploded so high today.

Hi Rub,

First of all this is not a RRT at least for 2 reasons. First - there is no such thing as (magic -just kidding) 'First leg of RRT". RRT should be recognised at a point of recognition (POR) only after the second leg will not just appear but closed.
Second - there should not be any price action to the left side of RRT. It should be clear rejection of price. Even if you'll see something like RRT but in current conditions I call it W&R rather than RRT. Because market was at this price just 1 month ago aprox. If market will fall - this falling will have another reasons than RRT.

How high do you think the EUR could realistically go before turning back down?
Thanks!

Well, If you remember a couple day Ago we've talk with Sentinel about weekly B&B and I've said that market is exiting from monthly oversold, so I prefer to see deeper retracement up, probably even to weekly overbought. It happens very often. I want you to tell two major things
1. Current up rally will be sold - 100%. I never buy first leg of rally, because it definitely will be sold by new sellers who wait for retracement to enter short. And I think that it can happen from 2 areas - 1.2620-1.2630 - daily confluence resistance, or 1.31 - weekly confluence resistance and weekly oversold.
2. Personally, I like 1.30-1.31 area for long term bearish position, just reread my weekly research. But market does not have to reach it. It can, but does not have to.

Now about current situation...
First of all - market has reached COP target at daily overbought and weekly pivot resistance 1 area. Definitely I do not want to buy here, and want to see some pull back. Besides, market starts to form DRPO on hourly chart, today NFP and long week end (5th of July - is a holiday). Just look for attachments.
Second, if it really reverse H&S on daily, and for now I think that this is it, usually the target of H&S is XOP, which is right at 1.30-1.31 area.

My plan is as follows - I would like to enter long on a pullback from current long bar on Tuesday (somewhere around 1.24 possibly), I do not want to see deep retracement. Nearest target - 1.2620-1.2630 daily Confluence resistance and daily overbought.
I'll write about it in more detail in weekly research.

 

[Mandrake]

Wow Sive that was a bit tough to digest. I'm getting a stomachache now heheh.

For RRT, in simple words - can I say that the RRT is only considered RRT when it appears at the top of the mountain ? or a reverse mountain ?

 

[rasto007]

pullback from the thrust

Sive,

how probable you think is the pullback from the recent high of 1.2538 back to 0.382 (1.2407) from when the thrust started? So far we saw only 16% retracement and that seems odd to me.

Rasto

 

[Sive Morten]

Wow Sive that was a bit tough to digest. I'm getting a stomachache now heheh.

For RRT, in simple words - can I say that the RRT is only considered RRT when it appears at the top of the mountain ? or a reverse mountain ?

Yes, this would be ideal. I've just attach monthly chart of Treasury bonds to show you good RRT example. Take pleasure

Sive,

how probable you think is the pullback from the recent high of 1.2538 back to 0.382 (1.2407) from when the thrust started? So far we saw only 16% retracement and that seems odd to me.

Rasto

Hi Rasto. Well, I can't estimate it right now, because we have to have some tools for that and I do not like slice and dice game. Let's wait for today's close after NFP. If I'll see something - I definitely will say it in weekly research.