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European Forex Professional Weekly 2010-03-04

Discussion in 'Sive Morten- Currencies and Gold Video Analysis' started by Sive Morten, Mar 4, 2010.

  1. Sive Morten

    Sive Morten Special Consultant to the FPA

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    EUROPEAN FOREX PROFESSIONAL WEEKLY
    Analysis and Signals
    March 4, 2010

    Fundamentals

    There are two most expected events for the nearest future that should influence the market's direction. The first is Non-Farm Payrolls data, second – the Greece situation announcement from EU officials.
    Although we’ve seen yesterday's increase in the ISM index (from 50.5 to 53) and especially in the ISM Non-Manufacturing employment index from 44.60 to 48.60, there is a high probability that NFP will be worse than expected. And more specifically not in the current month but in a revision of the previous data like in ADP employment. The ADP index for February shows numbers almost in a row with expectations - 20K, but the previous one was revised from -22K to -60K and has shown total result at – 58K. So, NFP is expected around -20K, but I think that we can see a bit better numbers for February (around -15K) but a negative revision for January and a total number around “-70K” – “-90K”. This revision is mostly due bad weather conditions that did not favor employment and a headwind for real estate development. All these events have influence on the situation with NFP and its revision to downside.
    Another situation is a Greece problem. According to recent news, Greece has found some additional possibility to reduce its budget deficit for another 4.8 Bln. EUR. But this is like a drop in the ocean. Officially Greece has time until March, 15 when they should announce their austerity plan. Till this moment I expect that rhetoric about a bailout plan and the way that it will be accepted will be smoothed. The ECB will not be hawkish in searching for a solution to this problem (even on today’s announcement). But let’s see on some numbers…
    First, Greece should pay out E 1.645 Bln in coupon payments due March 20th, E 8.48 Bln in redemptions and interest payments due April 20th, and, finally E 10.712 Bln also in redemptions and interest due May 19th. After that the debt burden will be much lighter. So the X-point is a possibility to payout these sums and market will track this very carefully. I expect that there will be a solid bailout from France and Germany (maybe directly, but more probable that through guarantees on new issued debt or through government-owned banks, like KFW in Germany), because Greece can’t accumulate such liquidity at such short term. If there will be a default in Greece, then it will have a strong negative impact on the whole EU financial sphere, so this scenario is almost impossible. The amount of bailout aid that can be made is about E 20-25 Bln. Until we will not see definite signs that Greece can pass through all these debt payments the EUR will stay under pressure. If sufficient aid will be granted sooner and crisis will be resolved for awhile then is possible that EUR can gain in mid-term.

    Résumé: In short term the future market behavior depends on NFP data. The midterm perspective for EUR/USD is based on a Greece bailout program development and the level of sufficiency of this program. As I said, X-point is a Greece’s debt redemptions in April and May. Until investors become sure that aid is sufficient to fulfill obligations, the EUR will stay under pressure. If the situation is resolved in favor of Greece, then we can see some retracement higher in EUR/USD, but Greece is only a top of the Iceberg. There are Spain, Portugal, Eastern EU countries, so in long-term the position of USD is more preferable.

    Technical

    Monthly (EURO FX all sessions CME futures)

    The monthly trend turns bearish. Market could not break through 1.34-1.3480 monthly 0.618 support in February and still above this level. Although we can see some retracement higher in mid-term period, the long term monthly target is COP=1.2881 (there will be an oversold by the way), next is OP=1.1482.
    If we look at DXY (Dollar index) it looks soft a bit. The index has reached weekly OP target at 80.784 and 0.618 resistance from a monthly thrust bar at 80.783 (this results in agreement) and shows W&R of this 0.618 resistance level. We have confirmed bearish and unconfirmed bullish monthly trend in DXY. Although March is just started and it can go up further during the March but current situation looks bearish for DXY and points on a possible retracement down.

    Monthly EUR/USD
    [​IMG]

    Monthly DXY
    [​IMG]

    Weekly (EURO FX all sessions CME futures)

    The market still is above solid 1.3400-1.3483 weekly and monthly support levels. Prices tried to pass through it but were pushed higher every time. In general all the past week was like one stop hunting event in the 1.3450-1.3650 range. Both levels were cleared by market-makers. That’s why I’ve recommended to stay aside for awhile in previous research. This 1.3480 penetration looks like Wash & rinse (W&R) of support level that makes possible some retracement upper in mid-term.
    The same thing we can see at weekly Dollar Index chart (weekly#1 DXY), but the W&R there is more obvious, besides there is not just support, but Agreement also.

    Weekly EUR/USD
    [​IMG]

    Weekly DXY
    [​IMG]

    Daily (EURO FX all sessions CME futures)

    As we said on previous research, market is making a decision. As a result market-makers had a great possibility to grab stops of many participants. On the daily chart we see at least three W&R of 1.3480 support and 2 W&R of 1.3650 resistance daily area. With all my respect to 1.3650 resistance, I think that 1.3400-1.3480 is much stronger, because it is monthly and weekly support rather than daily. The market even couldn’t reach an OP at 1.3398. Daily trend turns bullish, 1.3650 was broken yesterday, so, I expect that market should take some relaxation in mid term and show some retracement upper – 1.38-1.3870 level the nearest target. Besides, I expect worse than expected NFP (as we pointed out in Fundamental part). That should be enough for the near term, taking into consideration some weakness in DXY.
    Also I’ve posted 60 min EUR/USD chart to show target calculation for up move to 1.380-1.3870 target. We have OP=1.3814 that is agreed with 1.3799 resistance and XOP = 1.3951 that is also agreed with daily resistance at 1.3946. For now market has reached COP at 1.3729 and starts a retracement.

    Daily EUR/USD
    [​IMG]

    60 Minute EUR/USD
    [​IMG]

    Trade possibilities (1):

    Monthly

    Now we can say that a monthly bearish trend has been confirmed. Although there can be some improvements in Greece’s situation in the mid-term (and a retracement higher as a result), I think that in long-term USD is more favorable. The nearest long-term target is COP=1.2880.

    Weekly

    We have down trend, no oversold conditions. Taking in consideration some weakness in DXY and brighter W&R signal there, it makes possible to make an assumption that weekly EUR/USD also has shown W&R of weekly and monthly 1.3480 support. So, we can see some retracement higher in mid-term.

    Daily

    The context is as follows – weaker than expected NFP, W&R of weekly support at 1.3480, breaking daily Confluence resistance at 1.3650 and signs of retracement in the Dollar Index. The ECB will be dovish about Greece tonight, because they should make a decision as early as March, 15, so this event shouldn’t have much influence on the situation to my mind. So, the main driver for 2-3 days is NFP.
    I expect that we can see retracement higher, at least to 1.3820 level at near-term.

    Current European Forex Professional Weekly Signal - Forex Peace Army Forum


    (1) “Trade possibilities” are not detailed trade signals with specific entries and exits. They are expectations about possible moves of the market during the week based on market analysis.


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    General Notice: Information has been obtained from sources believed to be reliable, but the author does not warrant its completeness or accuracy. Opinions and estimates constitute author’s judgment as of the date of this material and are subject to change without notice. Past performance is not indicative of future results. This material is not intended as an offer or solicitation for the purchase or sale of any financial instrument. The opinions and recommendations herein do not take into account individual client circumstances, objectives, or needs and are not intended as recommendations of particular securities, financial instruments or strategies to particular clients. The recipients of this report must make their own independent decisions regarding any securities or financial instruments mentioned herein.
     
  2. Ahmed Hassan

    Ahmed Hassan Recruit

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    Sharing your signal

    if that possible could you share your account password so i can use your signal in my account i like your style but i can't get your signal on it's time

    best regards
     
  3. Sive Morten

    Sive Morten Special Consultant to the FPA

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    Hi Ahmed,
    Well, It will be better if you ask FPA directly about this. Actually we do not discuss such kind of cooperation yet.

    Concerning signals, you're right, because weekly research is just a common view, it seldom contains detail signal, I make much more trades during the week The majority of them is short-term (intraday basically).
     
  4. danmann

    danmann Recruit

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    US Financial Disaster?

    I don't know what or who to believe but
    I’ve read countless news headlines recently about how economists are “surprised” over an “unexpectedly bad” economic indicator.

    My opinion after 12 months of careful examination is that all
    financial dates that come out from US is fake and manufactured.
    The Greece issue is artificially induced, in fact US Justice Department
    had started an enquiry in this issue.

    I don't intend to give you any direction here but i want you to be very
    careful because US situation is in a disaster status and they keep coming
    with good news. All are designed to keep the dollar afloat but eventually
    will collapse and that will be sooner then you think. I see people that are
    kind of patriots or just in love with the dollar but you have to do your search
    and you'll easy find out that things are not like they presented.

    I Wish you all prosperity!
     
  5. an2

    an2 Recruit

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    sorry for asking... what's the W&R actually means? OP and XOP thing what are they?
     
  6. Sive Morten

    Sive Morten Special Consultant to the FPA

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    Hi An2

    Why are you apologize? It's good that you're interesting. Our ocupation there is "learning"

    W&R - means Wash & Rinse. This is Joe DiNapoli directional signal. In general - this is a situation when market shows break of some level and then prices go back fast. AS a result Big Guys clear up the stop orders around the level.
    Somewhere in this forum I already explained the mechanic of the market during this signal. But it simplier to see rather than explain in words

    This is Fibonacci expansions from the price swing. COP - contractive objective point is 0.618 expansion;
    OP -objective point is 1 expansion;
    XOP - Extended objective point is 1.618 expansion.

    Sive.
     
  7. Sive Morten

    Sive Morten Special Consultant to the FPA

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    Hi Danmann
    "12 month of carefull examination"...
    If the macro data is realy cheating, then he has used the same data for examination.
    It's impossible to collect primary data, for example on employment, from the whole US by just 1 person. I even not mention an nesecary authority for this procedure.

    If he thinks that data has been simulated, then, there should be a revolution in US... But it's not.

    All this message is just an attempt to rise interest to his person. There are many BIG Guys on the market. I don't think so that they do not see something that he sees.

    For me it's basically absurd. But... The probablilty of the second leg of recession still remains. But if it becomes closer, market will give us signs...
     
    #7 Sive Morten, Mar 5, 2010
    Last edited: Mar 5, 2010
  8. Selrach

    Selrach Recruit

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    Sive

    Thanks for sharing your analysis with us on this forum. I'm very new to this, but I follow your wisdom with great interest.

    Regarding your demo account, do you have an investor password for us to follow you via MT4? It would be nice to have a more visual way of tracking your trades.

    Thanks again
    Charlie
     
  9. Sive Morten

    Sive Morten Special Consultant to the FPA

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    Hi Charlie,
    Ahmed asked already about this.
    Look for answer just some posts higher.
     
  10. Selrach

    Selrach Recruit

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    Sorry! Didn't spot that.

    Thanks for your response.

    Charlie
     

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