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FOREX PRO Weekly April 02-06, 2012

Discussion in 'Sive Morten- Currencies, Gold, Bitcoin Daily Video' started by Sive Morten, Mar 31, 2012.

  1. Sive Morten

    Sive Morten Special Consultant to the FPA

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    MONTHLY
    So, March is over. Mostly market has moved to upside and now we see 3rd month in a row with higher close. Still during recent week price action was relatively narrow and has not made any impact on monthly chart. Our medium-term view is still the same – market could reach 1.35-1.37 K-resistance area. Since 1.35 was tested once already, it is possible that market will try to pass a bit further inside of Confluence area. Also, we have new monthly pivot level – 1.3244.
    The rest of analysis is the same – our focus is K-level as holding barrier. We can accept reaching of 1.37 from long-term bearish view (1.16), but we anyhow can’t justify move through it.
    The major interest here, as previously, stands with price behavior around Agreement support from one side and K-resistance area from the other. After hitting of 0.618 Fib extension target and Agreement market has shown retracement to 1.3509-1.3709 that is solid K-resistance at monthly chart and typically, price should not break it after just hitting of 0.618 target. Otherwise, it will be a strong sign that market sentiment has changed and bears’ power falls under question
    Still, as we’ve mentioned previously there is a possibility of AB=CD retracement on lower time frames. In this case market could show a bit deeper move inside of K-resistance. Although this is not significant for monthly time frame, it could become very important for us, since we mostly trade at daily charts.


    [​IMG]

    WEEKLY
    Trend holds bullish on weekly time frame. As on monthly chart here we also can see 3rd upward week in a row. I’ve marked new monthly pivot levels for April. Pivot resistance stands very close to nearest 0.618 target of our AB=CD pattern – PR1=1.3483 while target stands at 1.3530.
    So, if this move will continue we have two potential targets. First one, as we just said, comes at retesting of K-resistance 1.3509-1.3627 level. This target is 0.618 extension at 1.3530 level and creates an Agreement with K-area. Also pay attention that this target stands higher than tops of bearish engulfing, so if market will start move up – this high will not hold.
    Next and major target of this potential retracement also creates an Agreement with weekly Fib resistance level at 1.3814-1.3858.
    Finally we can say, that this overall picture creates a bullish context for daily time frame, price action with this AB=CD is quite logical – initial AB swing then AB=CD retracement to 50% support that gives us “222” Buy pattern. Despite the fact that currently all looks more or less clear - let’s discuss possible risks also. In fact controlling these risks will be our major task in near term. Major risk is compounding of AB=CD pattern. Since price has not moved above B point (1.35) yet, BC leg could shift to smaller ab=cd downward pattern with deeper retracement. If this will happen and market will move below 1.29 – this even could shift to butterfly or downward continuation – recall that our long-term expectation still 1.16 and current price action is just retracement inside major monthly downward trend. That is what we have to be aware of and we have to be extra careful if we will see some hints on this development on lower time frames. We do not see all these moments on weekly chart. Daily time frame is our major indicator.
    [​IMG]

    DAILY
    All price action mostly has finished on Monday of previous week. After solid upward candle and 1.33 Agreement breakout price has turned to some tight range consolidation inside of Monday’s candle. Here we have to understand what barriers market has on upward way if it has them at all, estimate important levels and understand why market does not move higher.
    First is market has passed through solid resistance level right in the beginning of the week. Hence market has no solid resistance levels above. If it has passed easily through major 0.618 resistance and Agreement it should not feel any problems with minor 0.786 or 0.88 levels. Second – market is not at overbought. Also we can point that market gradually destroy the harmony of potential H&S pattern that we’ve discussed and not it looks ugly. So, since it has no significant barriers it will be unnatural to see deep move down. But what depth will be acceptable? I dare to suggest that the same level as we’ve specified on previous week. It is K-support 1.3233-1.3239 and WPS1 = 1.3227. I like this level for many reasons – because this is K-support, because it includes WPS1 – as we know, when market stands in bull trend, WPS1 should hold downward retracements and because daily trend will hold bullish even if market will reach it. Finally, the strength of this level will tell us that market sentiment has changed if price will break it. Still to be absolutely honest, I prefer not to see move below 1.33. This is just safer and proves bull’s strength.
    As conclusion on daily time frame and for coming week:
    - Initially all eyes on 1.33. This is pivot point, nearest Fib support and previous 0.618 major resistance. I prefer to see that market reestablish move up from here;
    - If this will not be the case – wait for deeper move to 1.3230 area, that we’ve just discuss.
    [​IMG]

    4-hour
    Trend is bullish here. In fact, this time frame gives almost the same picture as daily one, I just want to add some details. First of all, you can see here, that if market still will start move down – we also have an Agreement with our 1.3230 area. It looks like not bad area to attempt to buy there. Second moment – take a look at first retracement – the depth is the same as recent one, but different angle. If market will support this harmony, then it could start upward right from 1.33 level. That’s why first level to watch is 1.33, as we’ve said.
    [​IMG]



    Conclusion:
    Long-term traders should sit on hands and wait when weekly AB=CD retracement will be over to enter short.

    On short-term charts context holds bullish. Preliminary estimated targets are 1.3540 and 1.37. One thing that we do not want to see in the beginning of the week is move below 1.3230 strong support level.


    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. Sive Morten

    Sive Morten Special Consultant to the FPA

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    EUR/USD Daily Update, Tue 03, April 2012

    Good morning,
    market is continuing to stand in consolidation and I see some worring signs with it. The point is that market has broken through major resistance level and, in fact, has no significant barriers ahead. If this is indeed so, why it stands in consolidation?
    Due to this moment it makes sense probably to do couple of things. First one is to trade only clear intraday patterns, while market will not show some more signs of its intentions on daily time frame.
    Second is - use only significant levels to try entry on long side. I like 1.3230 K-support and WPS1. Even if market will break it down - it will probably happen at second touch. After first touch there is a great probability of some pullback, that lets us move stops to b/e.

    On 4 hour chart we see potential for Butterfly Sell, that has 1.27 reversal point right at the same level of completion of AB=CD and WPR1 = 1.3420. 1.618 point stands at 1.3467.
    So, if you're scalper you may try to trade it.
     

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    #2 Sive Morten, Mar 31, 2012
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  3. Sive Morten

    Sive Morten Special Consultant to the FPA

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    EUR/USD Daily Update, Wed 04, 2012

    Good morning,
    Looks like our yesterday's worrings were not unreasonable. Market has behaved strange in recent days and that has led to opposite move.
    So, we've discussed this possibility as one of risks in weekly research. Currently we still will treat it as retracement, since there is a possibility exist for appearance of Gartley "222" Buy pattern around 1.29-1.2945 Agreement level. And by this pattern uwpard weekly AB-CD retracement still could happen. Until this level will not be broken we will talk about current move as retracement, also because weekly trend still holds bullish.

    On daily TF we see that market has passed through all pivot levels and MACD shows unconfirmed bearish trend. As you understand odds of changing daily sentiment to bearish are solid. IF MACD will confirm bear trend, tommorow we will start to search possibility to enter short.

    On 4-hour chart trend holds strongly bearish. Market has passed through our "marking area" of 1.3230 as knife through butter. So, if you've entered here Long (as I did by sleeping order), you have two choices - close position immediately, or try to exit at breakeven if market will show some pullback. This is possible, because today is ECB meeting and market very often retests significant levels, if it has passed them without any respect. I've closed my position since I have no possibility to monitor it. If you have - then you may try, I suppose.

    On hourly chart trend is also bearish, we have Double Top pattern with target at Agreement 1.3130-1.3145 level. That's the nearest destination of the market. How it will response there - who knows, may be some retracement will happen.

    So, now we can't think about long entry. Safer way is to wait daily trend confirmation and search for shorting the market tommorow.
     

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    #3 Sive Morten, Mar 31, 2012
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  4. Sive Morten

    Sive Morten Special Consultant to the FPA

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    EUR/USD Daily Update, Thu 05, April, 2012

    Good morning,
    So, we have now short-term bearish context with potential target at 1.29-1.2950.

    On daily there are two moments to point: MACD has confirmed bear trend and second - market has reached support - monthly pivot support1 and 0.618 target of downward AB=CD pattern. So, some retracement could come that we can use to enter short.

    On 4-hour chart trend still holds bearish, market also has reached Agreement around 1.3150 level.

    On hourly chart market has hit an area that we've discussed yesterday as a target of Double Top pattern. Now we see gradual move up - that is obviously retracement type of price action. Now we have infinite question how to enter. There are 3 type of entry technique you may choose:
    1. Gradual enter. Market now has reached first Fib resistance at 1.3157. You may enter with small lot here and with greater at K-resistance 1.3188-1.3196
    2. Enter only at K-resistance; It will be much better, if you will get some reversal pattern around it at lower time frame.
    3. Most safe way is to skip retracement and wait when market re-establish downmove. Wait when hourly trend will turn bearish, then drop time frame to 5-15 min chart and use nearest 3/8 retracement to enter short.

    As you understand, any of these techniques have as adv as disadv. The choice is up to you. Personally I will try to enter from K-resistance (But mostly because I have no time and possibility to monitor market intraday).
     

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    #4 Sive Morten, Mar 31, 2012
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  5. Sive Morten

    Sive Morten Special Consultant to the FPA

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    EUR/USD Daily Update, Fri 06, April 2012

    Good morning,
    by yesterday's price action you can understand why choosing of entry type is quite important. Since market has shown just 0.382 retracement on hourly chart you could enter short only by using gradual entry technique or enter on downward continuation.

    So, today market has hit support - the same 0.618 level + MPS1, and minor daily 0.88 Fib support (I do not have it on the chart).
    Also our forum member BeeKay8 has posted this nice picture of potential Butterfly "Sell" on daily. Although it could happen, recent price action forces me to have some doubts about it. There was too strong move down, mostly based on fundamental factors that have come from Fed. Probably downward continuation has more chances than Butterfly. Still, market at typical support level for butterflies - we'll see.
    To keep an eye on butterfly we have to look for reversal patterns on hourly time frame. If we will see any, then we will have to take a closer look at this possibility.

    On 4-hour time frame we also see that market has hit trend support. I do not see any patterns there so I just have marked significant Fib resistance levels. Overall context holds bearish. In current daily AB=CD pattern CD leg is steeper than AB. Thus, overall combination - falling like a stone market, faster CD leg and almost absence of any retracement makes me think that Butterfly will hardly survive.

    In nearest days there will be activity contraction due Easter Holiday in Europe, so, some reasonable price action we will be able to see only on Tuesday...
     

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    #5 Sive Morten, Mar 31, 2012
    Last edited: Apr 6, 2012
  6. fan

    fan Private

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    1.32 !

    Hi Siva,

    I agree 1.32 is very important level will tell us bull or bear coming. I'm worry about DJ index it seems on dead end. So I also worry about this level can hold on coming week. The VIX index is at bottom which is not a good signle.
     
  7. charbel

    charbel Recruit

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    Hi Sive,

    First of all thanks a lot for your predictions and i think that you are an excellent trader. Do you think that a double top could be forming on the weekly chart ??? i think that it will form and it will lead to the achievement of the 1.18. the 3430-40 is a key resistance from the weekly down trend and the 3518 is the 100 MA. what do you think of this scenario ?
     
  8. Johan Andersson

    Johan Andersson Private

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    If you take the bottom of the thrust up to the first top (H4) as X you will have a nice BAT BUY around the 1,3240 area, which support your idea that this is a good buy zone.
     
  9. georgeta

    georgeta Sergeant

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    AUD

    Hello Mr. Morten! Hello everybody!

    I will try to trade what I think it is a 3Drive Buy on Daily AUD. I will post the essence of the analysis for those who are interested. Maybe will get an expert opinion from Mr. Morten :)

    Not much explanation is needed. There is weekly Confluence Support, and 3 Drives on Daily chart that look very harmonic. Price almost reached 1.618 expansion of first retracement and 1.27 expansion of second retracement. If the ABC is valid then price reached 100 expansion. Additional confidence is given from W&R on Daily chart.

    The move down is pretty steep so there are good chances for the pattern to fail. I won risk much on this trade.

    Have a profitable week!
     

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  10. Aldo Colombo

    Aldo Colombo Corporal

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    Gap

    Thanks Sive. What meaning would you give to this gap upwards, if any?
     

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