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Euro Forex Pro Weekly 07-11 June 2010

Discussion in 'Sive Morten- Currencies and Gold Video Analysis' started by Sive Morten, Jun 5, 2010.

  1. Sive Morten

    Sive Morten Special Consultant to the FPA

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    Fundamentals
    This fundamental part of research will be rather small today, because there are not many major events that can have large influence on situation. As I’ve said in the previous week, the sovereign crisis has all chances to turn into a banking crisis. So, some rumors have appeared that Society General has a large derivatives loss, although they didn’t confirm it. Also here is some talking about Hungary and that it may fall into default. A spokesman for the government, Szijjarto, said that a default is no exaggeration. The government will not implement an austerity plan. Sizijjarto says the economy is in a grave situation. Linkages to Greece are being noted. Szijjarto said that the past government had falsified economic data, just like the past Greek government did. The truth for Greece has come, but it is yet to come for Hungary. In recent minutes, Hungary’s ex-Finance Chief Oszko said that Hungry is no where near default. At the same time, Hungary has to roll over 1.38 Bln $ of debts in August and 1.4 Bln $ in October. All this stuff in EU makes me think that at nearest time it will remind of a cartoon with EU officials as major persons who pressed down crisis signs here and there and crisis jumps out again and again in absolutely unpredictable areas.
    Concerning US economy data, in general it’s not bad and mostly preferable for Fed – low inflation and no blast in major stats, just supportive growth – it helps hold the Fed rate at low levels that is a most desirable issue for the Fed right now. If they suddenly start to tighten rates right now – EUR would likely be able to move below parity. When Fed sees growing inflation pressure and meet necessity to raise rates – probably the EU economy will start to rise to that time and the impact of Fed tightening will not be so dramatic. As for payrolls, in general they were not very good. Basic expectations were around 500+K, release has shown 431K. US Treasuries have jumped a bit, stocks fell but, as I’ve said this is a quite suitable for the Fed. At the same time, ISM and other Confidence indexes are stayed higher than the 50 level and show mediate growth.
    So, as a result, I expect that the crisis will turn from sovereign to public and private sector. Although some splashing can remain, like a situation with Hungary. I do not see definite shores right now and hold my expectation of gradual down move of EUR/USD.
    If, suddenly inflation in US will start to rise and Fed will have to tight rate – EUR/USD fall becomes violent.

    Technical

    Monthly
    The monthly chart shows a great down thrust, trend is bearish; we have 8 candles in a row with strong bearish bias – no sign of a pullback. Market has passed through monthly 1.2022 Fib support. Next Fib support is 1.1391. ABC-top pattern gives us OP=1.1480 target that agrees with Fib support. That’s the Fib work. Let’s look at Pivot points. 1.2600 is a monthly Pivot and it has not been touched by market yet. 1.1864 is a monthly Pivot support 1 that shows a possible low for the month. 1.1405 is a monthly Pivot support 2. Oversold level for June, according to Oscillator Predictor is 1.1850. So, we get two combinations of supports:

    1.1850 – Monthly Oversold and monthly Pivot support 1.
    1.1391 – 1.1480 Fib Agreement (OP with Fib support) and Monthly Pivot support 2.


    That’s being said - the market is near oversold condition and just below 1.2022 monthly Fib support, that can be still in play because June is not closed yet. So I don’t want to “Sell and Hold” in current condition. The trend is bearish, I want to be a seller, but I need a pullback to enter. The probability suggests that possible pullback in June can be from 1.1850. Until that level we can do scalp trades in lower time frames.

    Weekly
    The weekly chart shows the same strong bearish bias, the trend is bearish. I expect that market should bounce a bit from 1.1864 level – Monthly Pivot support 1. There are two attractive areas to go short for medium-term trading. First – 1.2600-1.2660 – Weekly confluence resistance and monthly Pivot and second – 1.3030 – 1.3170 – Pivot resistance 1, weekly confluence resistance. If there will be a daily ABC-bottom pattern that agrees with one or another level – Bingo. But taking in consideration the strength of down move, it is very probable that the market will do a shallow retracements and the Monthly Pivot should hold. Despite strong oversold at monthly and weekly - 1.26 area to establish medium-term short position is preferable for me.

    Daily
    There is a lot of stuff here at daily. Let me explain this chicken soup to you. As I’ve said during the week – daily trend has turned bullish, but price movement has not confirmed that and this is a bearish bias. So that has happened – the market has exploded to the down side and now the trend turns bearish. The red line that shows trend is a MACD Predictor and it comes in play on next week. Small colored lines – weekly pivot points, long dash lines – monthly Pivot points. During the last three months – Weekly pivots holds the price action and price never reach weekly Pivot resistance 1. At the same time the market makes deep retracements – near 0.618 from the previous swing down.
    First of all, it looks like that market will open below the weekly Pivot. If, on Monday, market continue move to downside 1.1828-1.1864 is area that I’ll be looking for to enter long. 1.1828 – weekly Pivot support 1, Monthly Pivot support 1- 1.1864 and daily oversold.
    If, on Monday, market will open with some gap up – look for price action around Weekly Pivot. There will be a MACD Predictor also. If by the end of Monday market will hit weekly pivot, hit MACD Predictor and reverse back – closed below pivot – I’ll be searching for an opportunity to enter short with target at 1.1850. If market will close above Pivot and trend turns bullish – 1.2186-1.2230 that’s the area that I’ll be watching as a first target of a pullback, because – 1.2186 0.618 Fib resistance and as I’ve said, market makes deep retracements and 1.2230 – weekly Pivot resistance 1 and Fib resistance also.
    So, conclusion – Buy near 1.1820-1.1850, sell on Monday if market will hit Pivot and close below it with 1.1850 target. Buy with 1. 2186-1.2230 target if the market will close above Weekly Pivot on Monday and trend will turn bullish.
     

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    #1 Sive Morten, Jun 5, 2010
    Last edited: Jun 6, 2010
  2. bilalh11

    bilalh11 Recruit

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    Sive Morten analysis

    After the big downtrend move on friday, and the news on sunday from hungary, i would expect the market to be somewhat calm on monday, with Euro tracing back to the 1.2070 zone. JMO:)
     
  3. jedzn

    jedzn Recruit

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    Pivot point calculations

    Hi Sive,

    I've been following your thread for the past few weeks and love it. Thanks so much for sharing your information!

    One question for you: how are the Monthly/Weekly/Daily pivot points calculated? Is that based on the DiNapoli levels or is that something I can calculate on my own using other software/indicators?

    If you've already answered this question in a previous thread, my apologies... just let me know and I'll go look for it. I didn't see it previously, but I may have missed it.

    Thanks again,

    Jon
     
  4. Lucas Gremista

    Lucas Gremista Private, 1st Class

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    that's the kind of signal that we, dumbasses newbie trades need, buy at, sell at, with "x" target. :)

    my only question is, your targets are based on monday's market's closing time... what GMT time would that be?
     
  5. onenikos

    onenikos Corporal

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    Good work as always

    Dear Sive, I have been around for sometime now and have seen quite a bit of good analysis both from name banks and individuals. I must admit that your analysis has made a big impression on me. I consider myself very lucky that I can have your weekly analysis. So let me join all the other here and thank you for sharing it with us.

    By the way with the IMF already committed to huge loans to Greece and with possible broader involvement in the EU (although they have stated that they are drying out of cash) they have to buy Euro for those payments. It is interesting to watch out for the payment dates.

    All the best to you.
     
  6. Sive Morten

    Sive Morten Special Consultant to the FPA

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    Hi John,
    No this is not a DiNapoli analysis.
    Pivot point = (H+L+C)/3, H, L, C - High, Low, Close of a previous bar
    Pivot support1 = 2*pivot point - High
    Pivot resistance1 = 2*pivot point - Low

    All my charts are EUR/USD CME futures. Just check for contract specification
    CME Group - Home
     
  7. Sentinel

    Sentinel Sergeant

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    Bread & Butter Signal as follows :

    Sell at 1.1965 - 1.1987 or Sell at 1.2046 - 1.2056 (either one you chose depending on your predictions how deep the retracement will be) with SL at 1.2140 (0.786 fib level). TP will be calculated later on depending the B reaction point.
     

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    #7 Sentinel, Jun 7, 2010
    Last edited: Jun 7, 2010
  8. onenikos

    onenikos Corporal

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    More possibilities

    I would wait to go short at just below your SL. I can always take the train downhill if it starts going that way:D
     
  9. ChiefDM

    ChiefDM Recruit

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    Looks like the second selling area at 1.2040ish is the one to look for, there seems to be no sustained thrust to the first selling area at 1.1965 on the 5 minute. Thoughts?
     
  10. Sentinel

    Sentinel Sergeant

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    There is no reference in B&B's definition to a "sustained trust" retracement according to DiNapoli as far as I remember so I don't think that is important. But take care; second confluence may not breach since all the Daily, Weekly and Monthly trend (Dema) are bearish and there is a strong trend downwards.

    I think probably a W&R of one of these levels will show..
     
    #10 Sentinel, Jun 7, 2010
    Last edited: Jun 7, 2010

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