Sive Morten
Special Consultant to the FPA
- Messages
- 18,648
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.