Euro FX Pro Weekly 5-9 July, 2010

Sive Morten

Special Consultant to the FPA
Messages
13,381
Monthly
The market has pulled back gradually from oversold. The trend is bearish, next nearest target is Agreement at 1.1391-1.1482. A Bullish “Stretch” pattern still in place. At the same time, I think that this is just a pullback from the strong down thrust and we will see another leg down. The target of retracement could be different. When the market extremely oversold, like during AB down move, usually it shows deep retracements - 0.618 or even 0.782. But currently, the market is not so oversold, so, 0.382 retracement is more probable – it’s around 1.30-1.31 area. It’s not a bad move.

Weekly
First of all, the weekly trend turns bullish. The green line on the chart is a 3x3 SMA, blue line – Oscillator Predictor upper bound that shows us overbought level. The next strong resistance that I prefer for opening short positions is 1.30-1.3123 Confluence resistance and weekly overbought.
We have an excellent thrust down; market has penetrated 3x3 SMA and almost reached Fib resistance at 1.2617. At the same time the weekly chart does not show us a definite level to enter short. Taking into consideration monthly oversold, retracement can be deeper, even to 1.31 area before B&B will start to work. So, the particular level for entering short we should search on a lower time frames.

Daily
As we’ve discussed on previous week, 1.2600 was a target and it was almost reached. A couple days ago the market made a nice thrust and reached COP target, daily Confluence resistance and daily overbought area. So, I do not want to buy right here, at the same time I think that we can enter long on a pullback. Next target – 1.2760-1.28 area – very strong resistance, that includes OP, Confluence resistance, monthly pivot resistance 2 and weekly pivot resistance. If we will pass 1.2630 Confluence resistance, of course. Let’s look at the area, when we can enter long.
This is also a daily chart#2 but with supports now. Two areas, that I like to enter long. First one is 1.2440 – combination of Fib support and weekly Pivot point. Second – 1.2333 Confluence support area and neck line. If the market intends to move higher it should not break this area. So, drop your time frame and watch for ABC’s that end at these levels, and forming any Buy signals there. Just one warning – if weekly B&B really starts, then the target of this pattern – 1.2158 area.

2-Hour
Let’s look at the 2-hour chart, although it’s not as typical as 1-hour. First of all, the trend is bearish, may be something already starts forming – RRT at the top, that possibly can shift to H&S. This is just an assumption, but we should not forget that we are at daily confluence resistance, overbought and reached COP. So, some retracement is reasonable and logical.
 

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Sentinel

Sergeant
Messages
153
Sive, wish you a pleasant week, thanks for the analysis (even though I haven't had the chance to read it yet), I was wondering when we will return back to the old mail format with charts inlay with the analysis. I am unable to printout this format.
 

Sive Morten

Special Consultant to the FPA
Messages
13,381
Sive, wish you a pleasant week, thanks for the analysis (even though I haven't had the chance to read it yet), I was wondering when we will return back to the old mail format with charts inlay with the analysis. I am unable to printout this format.
Hi, Sentinel,
I expect that we will resolve this problem till the next research.
 

Sive Morten

Special Consultant to the FPA
Messages
13,381
Sive,

What does

B&B
COP
XOP

Stand for?

thanks
B&B - Bread&butter trade. Check DiNapoli book for details or my previous trade description (I do not remember exactly which one, somewhere I show and example of B&B and Double Repo trades). Or check my previous research there was a link.
COP - Fib expansion 0.618
XOP - Fib expansion 1.618
 

Ghazali

Private, 1st Class
Messages
61
Excellent Sive!

Hi Sive Good Morning,


The market retouched the 1.26xx level as you predicted. as this is the second touch shall we go for a short here or wait until it reaches 1.31xx ? How to make sure that it will continue upwards to 1.31xx or it will just fell off from 1.26xx level?

Teach me some guide lines bro..
TQ :)

Bye
 

aymen335

Recruit
Messages
7
Hi Sive Good Morning,


The market retouched the 1.26xx level as you predicted. as this is the second touch shall we go for a short here or wait until it reaches 1.31xx ? How to make sure that it will continue upwards to 1.31xx or it will just fell off from 1.26xx level?

Teach me some guide lines bro..
TQ :)

Bye
The 1.26 level comes at the neck of a H&S which is a reversal pattern. I don't think it is a good level to go short from there.
 

Sive Morten

Special Consultant to the FPA
Messages
13,381
EUR/USD Update, Wed 07, July

Good morning everybody

Last three days market just creeping in a line with overboought. As being said - we see reverse H&S pattern, and the target of this pattern 1.30-1.31 area. At the same time market at daily overbought and daily confluence resistance. The Probabiliy suggests i.e. odds suggests that this is not a good area to enter long. Because market will struggle here to go further and will be unstable.
Personally, I like retracement to weekly pivot and 4-hour confluence support area to enter long. This is 1.2440-1.2470 area, because I can enter on better price and place tight and logical stop.
Another area - 1.2350-1.2370, but it too far. If this is a really H&S pattern, then market should not show deep retracements.

So, that's being said - I prefer wait, until market will reach 1.2440-1.2470 area, then look for some Buy signals there. If market will resume up move - nearest target will be OP at 1.2750
 

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