FOREX PRO Weekly April 04-08, 2011

[Sive Morten]

Sorry!
Here is the chart.
The question is: should we get in or it is to late. I do not know where to place the stop.
Thank you!

Oh yes,
I remember it. We spoke much about this Butterfly even in 2010.
Yes it has hit the target. Also it has completed AB-CD pattern.
Although we see some bounce from it - I do not see any signs of up thrust on weekly and daily charts - only some gradual move up. Although daily trend is bullish now.
As a one possible solution - you may try to enter with less volume on some daily retracement. If market will accelerate to the upside - then you will be able to add more...

 

[Jyotiprakash Pal]

Thanks sir ...

 

[Sive Morten]

EUR/USD Daily Update, Wed 06, April 2011

Good morning,
Although we've said that some bearish patterns have appeared on daily time frame, yesterday's price action makes me think, that bullish bias is still intact.

Daily
If the target of the market was stops above the previous high, as market has shown its W&R and Stop grabber -it should accelerates to the downside. But yesterdays, our crucial area around weekly pivot at 1.4148 has held and market jumped out from there.
Even more, currently market stands above those high, that it has cleared out. This is a bullish sign. Standing above pivot tells that market sentiment is bullish currently.
Nearest target is 1.43-1.4310 - pivot resitance 1+0.618 FIb extension.

4-hour chart
trend is bullish. Here we can see additional targets at 1.4330-1.4340 area

1-hourly chart
Trend is bullish. I suppose that we may try to enter long from 1.42-1.4210 area - hourly confluence support, with stop below 1.4170. Market should not erase the last swing up, if it is really strong.

 

[Paul McConnell]

Bullseye!

Lovely work Sive.
Euro playing out as you forecast on your weekly analysis.
I am beginning to think that you are the market maker
I have had a good run so I sit on my hands and watch price action.
Double repo on GBP changed trend and is still playing out.
Blessings and have a good day..
Paul

 

[timsar]

Thank you Mr Morten for sharing your knowledge with us!

 

[Jyotiprakash Pal]

Thanks sir ..as usual detailed ..

Ireland sees no bailout rate cut before June - report | Reuters

How much damage it will make ... !

 

[rasto007]

Rate hike by ECB

Sive,

from reading many articles, it seems that everyone is expecting a rate hike tomorrow. Even ECB seems clear on it. Would you say that the market has already incorporated this information into the price and so if it proves to be reliable and the rate will be increased by 25 bp, there will not be any significant rally in EUR because of the increase?

Rasto

 

[Sive Morten]

Sive,

from reading many articles, it seems that everyone is expecting a rate hike tomorrow. Even ECB seems clear on it. Would you say that the market has already incorporated this information into the price and so if it proves to be reliable and the rate will be increased by 25 bp, there will not be any significant rally in EUR because of the increase?

Rasto

Yes, Rasto
Actually I intend to say that tomorrow. ECB inflation is now greater than 2%, so ECB will have to hike rate.
Since this decision is obvious - this event has incorporated in current rate already.
I expect that after ECB testimony, we will see fast profit taking in EUR/USD, and hence W&R of 1.4350-1.44 area.
It's better to close longs today, or at least tomorrow before ECB...
Besides, further move up of EUR is not logical from fundamental point of view, taking in consideration all problems that we've discussed - PIIGS and different debt ratio, different economy paces for core and periphery...
1.40 is a fair fundamental level for EUR currently. So, it looks a bit overbought now. And possibly only because speculators wait for rate hike and hold longs yet.

 

[Sive Morten]

EUR/USD Daily Upate, Thu 07, April 2011

Good morning,
Today is an important day for EU (although we've discussed it with Rasto in previos post already). It's obvious that ECB will hike rate today. And it could lead to fast profit taking from speculators and deep bear's pullback. So be careful. Technically it could appeared as hitting our long term 1.4350-1.44 target and W&R of previous highs.

Daily
Trend turns bullish and market has hit our yesterday's target - 1.4310. If you will look at MACD indicator, you can see bearish divergence. Just above the market at 1.4350 strong area of resistance - monthly pivot resistance 1 and multiple targets of different timeframes. So I do not want to buy here...
From the bullish perspective - 1.4230 level is a crucial one. This is daily trend, this is previos highs. If market will return below it (and probability of this event is significant) we could see deeper retracement. Be carefull.

4-hour chart.
Here you can see that some target stand near the same area. Trend is bullish.

Hourly chart
Trend is bearish. Take a look at ABC pattern - it shows fast acceleration to 100%, then shallow retracement, then 1.27 target, and now turns in retracement. This is bullish price action, and very often it suggests that market should hit 1.618 target - 1.4359. Tada! The same level.

So, conclusion is follows:
Although intraday behavior tells that market should hit 1.4350-1.44 area - position's opening for that purpose is very dangerous. Because we can see really doom and gloom later on the day.
Hitting of 1.4350-1.44 could happen right before announcement on extreme spikes and volatiility...

 

[osasyankee]

Staying Out

Thanks Sive for your wonder analysis.

Don't you think the best option now is to stay out till after the Interest Rate release?

That's just my personal opinion, Because right now, technical may be out of play to forcast the direction of the market.