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FOREX PRO WEEKLY #2, November 20-24, 2017

Discussion in 'Sive Morten- Currencies and Gold Video Analysis' started by Sive Morten, Nov 19, 2017.

  1. Sive Morten

    Sive Morten Special Consultant to the FPA

    Aug 28, 2009
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    Second research will on FX as well, guys. This time it will be dedicated to NZD. You'll understand why I've chosen this currency through research below...

    Some fundamentals in the beginning:

    (Reuters) - New Zealand Prime Minister Jacinda Ardern said on Tuesday she was “not at all” concerned by a recent fall in the New Zealand dollar.

    The local dollar has fallen more than 5 percent since September's election, amid concerns about the Labour-led government's planned policy changes including plans to review the central bank act.

    The currency rose around a quarter of a U.S. cent on Tuesday after the government said there were no plans to include the kiwi in a review of the Reserve Bank Act.

    “These are fluctuations that are well within the rate of fluctuations we have over a six-month period,” Ardern told Reuters. “Certainly I think probably where we are at exporters wouldn’t be complaining right now either.”

    Ardern also said it was too early to say whether member states would achieve an agreement on the Trans-Pacific Partnership trade deal this week.

    The 11 TPP members had set a goal of reaching broad agreement on the pact on the sidelines of the Asia-Pacific Economic Cooperation meeting in Vietnam.

    “Certainly I know that there are a number of member states who would be seeking that, at this stage I can’t say whether that’s likely or not. I think we’ll have a good indication once we are on the ground.”

    For the New Zealand dollar, analysts have marked down their forecasts to reflect recent slippage in the currency amid concerns the country’s new left-leaning Labour government would pursue policies less welcoming to foreign investment.

    The median projection was for the kiwi to stand at $0.7000 in one month, down from $0.7200 in the previous poll. It was also seen staying at $0.7000 right out to November next year.

    The currency was last trading at $0.6919, having slid from as high as $0.7557 in July to as deep as $0.6818 in October.

    It got a mild boost last week when the Reserve Bank of New Zealand (RBA) nudged up its inflation forecasts in response to the fall in the currency and to Labour’s plans for more government spending.

    “We do see the risk that the NZD recovers some of its recent election-related losses as structural factors such as the high terms of trade will continue to be supportive,” said CBA economist Nick Tuffley.

    Yet he also predicts the RBNZ will not raise interest rates until the first quarter of 2019, a marked contrast to the U.S. Federal Reserve which has penciled in a hike for December and three more next year.

    COT Report
    NZD right now stands a bit overextended to the downside by recent CFTC data. Ultimate bearish position was fixed in 2015 around -20K contracts, but it was just once for decade. Now it stands for -12K. In general 13-15 K contracts of bearish position should be treated as "near extreme". Besides, for decade NZD was net bearish not too long.
    Now net short position is growing as open interest. Open interest also stands near record levels. Thus, sentiment analysis shows that NZD could drop a bit more, but as it stands near saturation - this is perfect combination for upside bounce on monthly and weekly time frames. That's why it is interesting right now.


    In fact, we've taken a look at kiwi not too far - approximately month ago. But situation has changed drastically since then. Even on monthly chart.

    Bearish reversal candle, was supported by big political shifts and led NZD to more drop than just retracement that we've talked about initially.

    As a result market has erased major bullish AB=CD pattern, as price has dropped below "C" point
    Trend has turned bearish on monthly chart, overall drop looks really strong. In fact we've got bearish reversal swing. Taking in consideration CFTC data - now there is just one question - where NZD will stop and turn to upside retracement.

    Monthly chart gives not much inputs on this sub. As NZD is not at oversold here, we have only one suggestion - may be 5/8 Fib support @ 0.6670 will hold it?


    This time frame brings a bit more info. Previously we already have mentioned major AB-CD target that stands around 0.6750 area. It also coincides with MPS1.

    Reaction on OS was mild and market has dropped further. Now it stands at minor 5/8 Support, while major monthly support stands low. AB-CD target stands slightly higher than Fib level, but for weekly chart 50-70 pips is not a big distance and we probably could speak on 0.6670-0.6750 area where bullish reversal pattern could be formed:


    On daily time frame trend also has turned bearish, our flag pattern has been broken down. Now market stands in upside reaction to reaching of OS area.

    At the same time, price stands rather close to completion of AB-CD target. If we plot extensions of flag retracement, then you could see that AB-CD target stands between 1.27 and 1.618 extensions.

    So, NZD should start some preparation to finalizing of downward action. It means that some bullish pattern could start forming here. As market already has dropped below previous lows we will not get butterfly, but we could get 3-Drive, or even reverse H&S.

    Next week could start from minor retracement, but it should stand inside last swing down to keep scenario valid:


    So, guys, here we need just watch what will happen. If market will drop immediately and follow to 1.618 extension - in this case H&S could be formed. While Monday will start with retracement, it also could be some other pattern, such as 3-Drive or just wedge.

    On intraday chart it seems that retracement should be somewhere to 0.69-0.6925 area. This is K-resistance and WPR1. Pivot resitsance 1 also will be good indicator of sentiment. If it will hold upside action then indeed it will be just retracement.

    That's being said, downside action should continue as major daily AB-CD target has not been met yet. On Monday we're watching for minor retracement up, somewhere to 0.69-0.6925.


    NZD now looks interesting as price has made major shifts on monthly chart. As sentiment as fundamental background mostly support some relief after long collapse. We think that it's time to start monitor bullish reversal patterns around 0.6670-0.6750 area.

    The technical portion of Sive's analysis owes a great deal to Joe DiNapoli's methods, and uses a number of Joe's proprietary indicators. Please note that Sive's analysis is his own view of the market and is not endorsed by Joe DiNapoli or any related companies.
  2. Butcherfx

    Butcherfx Private, 1st Class

    Aug 10, 2017
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    BITCOIN ))

    Last few months i trade especially BTC/USD and the results are promising.


    Weekly XOP being tested.



    Market is at OP resistance. Weak dynamic pressure on daily buy signal. Normally i give it 5 bars after trend change so we have more day. Who nows may be we can see a big wash and rinse at fifth bar.


    Note: Bitcoin is respecting dinapoli levels really good at daily,4 hr and 1 hr. Sometimes I go lower even to 5min chart with standart trade plan or thrust trade plans.
    Lolly Tripathy and Sugit like this.
  3. Joh

    Joh Sergeant Major

    Oct 11, 2007
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    Thank you Sir Sive for both NZ and the Eur reports. Brilliant as usual.Gosh wish i had a third of your fast knowledge :)
    Davidovic and Sive Morten like this.
  4. Sive Morten

    Sive Morten Special Consultant to the FPA

    Aug 28, 2009
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    Hi Roger,
    Recently I've talked with another DiNapoli follower, (he was teached by Pieter). So, he also talked about good respect by BTC DiNapoli tools - levels, extensions, etc.
    It seems, that BTC shows effect of "virgin" market, as not much bargain hunters have appeared there yet...
  5. RahmanSL

    RahmanSL Major

    Jan 16, 2010
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    Thanks Sive...another good article & insight.
    ...hmmmm...I am looking at NZD/USD with interest :D

    Cheers and all the best!
    Lolly Tripathy and Sive Morten like this.
  6. Sive Morten

    Sive Morten Special Consultant to the FPA

    Aug 28, 2009
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    Good morning,

    (Reuters) - Gold prices crept up on Tuesday ahead of the release the next day of minutes of the last U.S. Federal Reserve meeting, which could offer clues on the pace of potential interest rate hikes by the central bank.

    Spot gold was up 0.2 percent at $1,279.21 per ounce by 0553 GMT. The metal fell about 1.4 percent on Monday in its biggest one-day percentage drop since Sept. 11. U.S. gold futures for December delivery gained 0.3 percent to $1,279.20.

    "Given the fact that the December rate hike is almost a done deal, market watchers will look more closely at what is the Fed rhetoric for post-December," said OCBC analyst Barnabas Gan.

    Higher interest rates tend to boost the dollar and push bond yields up, putting pressure on gold prices by increasing the opportunity cost of holding non-yielding bullion. Fed Chair Janet Yellen said on Monday she would resign her seat on the Fed's Board of Governors once Jerome Powell is confirmed and sworn in to replace her as head of the U.S. central bank.

    "The fact that Yellen has now confirmed (she will be leaving) is adding a little bit of volatility as traders adjust
    their positions while they make sense of the implications of the incoming new Fed chairman Jerome Powell in terms of interest rate direction," said Loh Mun Chun, director, private wealth at GoldSilver Central in Singapore.

    Traders were also keeping an eye on safe-haven demand for gold after U.S. President Donald Trump put North Korea back on a list of state sponsors of terrorism on Monday. "It is very hard to predict as to what Trump is going to do ... We are waiting to see how North Korea reacts and whether it escalates global tensions," OCBC's Gan said.

    Spot gold may break support at $1,274 per ounce, and fall towards the Oct. 6 low of $1,260.16, according to Reuters technical analyst Wang Tao.

    So, on gold market situation looks moderately bearish. On daily chart we've got failure attempt of upside breakout and now market has formed perfect bearish engulfing pattern. So, in longer perspective we could get butterfly pattern here with targets at 1245 and 1230. Besides, since October market shows signs of bearish dynamic pressure as trend has turned bullish but price action is not.

    on 4-hour chart price is forming widen consolidation and now 5th swing stands, i.e. breakout should follow:

    Thus, in current situation taking of short position around some Fib resistance looks not bad. If you will go short around 3/8 Fib level - be prepared still that gold could rise to 5/8, because here some H&S shape exists:
    Lolly Tripathy, fight2live and Sugit like this.
  7. yousimon

    yousimon Private, 1st Class

    Oct 9, 2016
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    Daily F5 is Hold And Support Weelly F3/F5 is valid


    Butcherfx likes this.
  8. Sive Morten

    Sive Morten Special Consultant to the FPA

    Aug 28, 2009
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    Good morning,

    (Reuters) - Gold prices remained in a narrow range on Wednesday as investors remained cautious ahead of the release of minutes from the U.S. Federal Reserve's last meeting, which could offer hints on the outlook for the central bank's monetary policy.

    Spot gold was nearly unchanged at $1,280.20 per ounce by 0421 GMT. U.S. gold futures for December delivery were down 0.1 percent at $1,280.10.

    "We are not really sure that this (Fed meeting minutes) will have much of an impact given that the decision to raise rates in December is pretty much a forgone conclusion," INTL FCStone analyst Edward Meir said.
    "Nevertheless, we suspect that investors will want to see what policymakers are thinking about the rate situation and how aggressive they will be on this front going forward."

    The Fed kept interest rates unchanged at its last meeting, minutes of which will be released on Wednesday.
    The Fed is "reasonably close" to its goals and should keep gradually raising U.S. interest rates to avoid the dual pitfalls of letting inflation drift below target for too long, and of driving unemployment down too far, Fed Chair Janet Yellen said on Tuesday.

    Higher interest rates help the dollar gain and push bond yields up, putting pressure on gold prices by increasing the opportunity cost of holding non-yielding bullion.

    Spot gold looks neutral in a narrow range of $1,274-$1,283 per ounce, and an escape could suggest a direction, according to Reuters technical analyst Wang Tao.

    In other markets, the dollar treaded water against its peers on Wednesday, capped as U.S. Treasury yields failed to rise despite increasing investor risk appetite in broader financial market. Amid lack of investment demand, gold's inverse relationship with the dollar is the strongest in more than a decade, Julius Baer analyst Carsten Menke said in a note.

    "While the dollar is unlikely to return to its recent peak, we still see upside from current levels as the U.S. Federal Reserve continues to hike interest rates. This should weigh on gold prices heading into next year."

    A stronger greenback makes dollar-denominated gold more expensive for holders of other currencies.

    In the beginning just brief look at gold and then we will turn to NZD. On gold market it seems that before downside action price will climb to 1286 area - as it is forming AB-CD pattern. AB=CD target has been hit, CD leg was rather fast. That's why deeper upside action should happen. This, in turn, should lead to appearing of H&S pattern and possible downside reversal:

    On NZD - we still wait for 0.6745 target been hit. As we've suggested in weekly research, kiwi as turned to upside retracement in the beginning of the week, but it looks so right now, that it is over:

    On 4-hour chart price has completed perfect harmonic swing right to K-resistance and WPP:

    As a result we've got "222" Sell with minor H&S pattern at top. So, may be this is preparation for downside continuation:
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  9. Sive Morten

    Sive Morten Special Consultant to the FPA

    Aug 28, 2009
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    Good morning,

    (Reuters) - Gold prices nudged lower on Thursday, with investors taking profits after gains of nearly 1 percent in the previous session on weaker U.S. economic data and concerns among some Federal Reserve policymakers over lower inflation.

    Many Fed policymakers expect that interest rates will have to be raised in the "near term", the minutes of the U.S. central bank's last policy meeting showed on Wednesday. However, some members expressed concern over the inflation outlook and emphasized they would be looking at upcoming economic data before deciding the timing of future rate rises.

    Spot gold was down 0.2 percent at $1,290.05 per ounce by 0405 GMT. U.S. gold futures for December delivery edged down 0.2 percent to $1,289.80.

    "There appears to be a bit of profit taking ... With the impending rate hike from the Fed next month, maybe (investors think) gold prices have gone a bit too high and will come down in the aftermath of the rate hike," said John Sharma, an economist with National Australia Bank. "The Fed has some inflation concerns and we don't know how it's going to be in the medium term. There is lot of uncertainty everywhere and you can see it in gold's (rangebound) movement."

    Earlier in the week, Fed Chair Janet Yellen stuck by her prediction that U.S. inflation will soon rebound but offered an unusually strong caveat: she is "very uncertain" about this and is open to the possibility that prices could remain low for years to come.

    "Although the minutes seemed to tick a December hike as a done deal, traders took fright at their more 'data-driven' neutral stance into 2018," said Jeffrey Halley, a senior market analyst with OANDA. "Gold was one of the chief beneficiaries of the ensuing general dollar sell-off (on Wednesday) as the U.S. heads into
    its Thanksgiving break ... We would expect trading over the coming two days to be muted with the U.S. away."

    U.S. markets are closed on Thursday for the Thanksgiving holiday, while Japan also has a public holiday.
    Spot gold may test a support at $1,283 per ounce as it failed to break resistance at $1,297, according to Reuters technical analyst Wang Tao.

    Second setup today will be very short-term, guys, and it stands on JPY. Now Yen is coiling around important daily support area - 50% level and OS:

    At the same time price has completed extended 1.618 AB-C target on 4-hour time frame:

    Final part of whole drop is suitable thrust down for DiNapoli directional pattern - either DRPO "Buy" or B&B "Sell". As price is near strong support on daily chart, then chances on upside respect are not bad. Now we need just watch what pattern will be formed here:
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  10. Sive Morten

    Sive Morten Special Consultant to the FPA

    Aug 28, 2009
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    Good morning,

    (Reuters) - Gold prices inched up on Friday as the dollar remained under pressure after minutes of the U.S. Federal Reserve's meeting revealed that some policymakers were concerned about lower inflation.

    Spot gold was up 0.1 percent at $1,291.50 per ounce, as of 0419 GMT. Bullion was down about 0.2 percent for the week. U.S. gold futures for December delivery dipped 0.1 percent to $1,291.10.

    "Investor appetite (for gold) is low even after slightly more dovish-than-expected Fed minutes. There just has not been enough to entice investors back into the market in great amounts," ANZ analyst Daniel Hynes said.
    "Investors are still a bit cautious even though the December rate hike is well expected. They aren't willing to put any aggressive decisions in place before that hike comes through," he added.

    Many Fed policymakers expect interest rates to be raised in the "near term," according to the minutes of the U.S. central bank's last policy meeting released on Wednesday. However, some members expressed concern over the inflation outlook and emphasized they would be looking at upcoming economic data before deciding the timing of future rate rises.

    Higher interest rates tend to boost the dollar and push bond yields up, putting pressure on gold prices by increasing the opportunity cost of holding non-yielding bullion.

    Spot gold has aborted a bearish target at $1,283 per ounce as it seems to have found a support at $1,288 and is biased to break above a resistance at $1,296, according to Reuters technical analyst Wang Tao.

    "Gold is moving in a very tight range with no clear driver for gold - either up or down," Argonaut Securities analyst Helen Lau said. "So far we don't see any driver in the short-term and it is likely to stay range-bound for some time."

    On gold market guys, although price is coiling around previous top and border of triangle - bearish setup is stil valid. I will switch to bullish view only if price will break above 1305 top and form bullish reversal swing. Until this will not happen - bearish scenario will be valid.


    Despite significant upside swings, gold keeps valid bearish scenario. Thus, on daily chart, despite upside breakout, gold doesn't develop success but stands around trendline. On 4-hour chart we have large AB-CD pattern, which has reached just 0.618. CD leg is much flatter than AB and has too choppy shape to call it as bullish trend. Mostly it has feature of retracement.
    At last stage of this action - gold can't reach MPR1 and now stands around previous top that could be treated as sign of weakness...

    Still, as gold has not turned down at previous levels that potentially were suitable for reversal, on hourly chart we have last extension that gold probably should meet before downside reversal. This is 1295 target. And it could be finalized by butterfly pattern. This will be the moment of truth for gold market. If market is bearish - it will turn down there, if not - then we should be ready for upside breakout of 1305 top:

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