FOREX PRO Weekly April 22-26, 2013

[Sive Morten]

Sive, couple of things:
1. Your prediction of start of bullish move in euro within 2 weeks is contrarian. The majority of equity analysts are bearish on equities starting within 2 weeks ("Sell in May and go away"). The euro is a risk-on currency, hence if equity market falls, euro is expected to fall. You're usually right when you predict something. I'm going to follow this one.
2. Cable's price action on Fri mirrored the euro. You mentioned last week that GBP is setting up for down move. Would it be appropriate to look for a short entry price on the pound along the same lines as euro? Does the GBP show retracements similar to euro (shallow ones, generally 38.2% or 50%)?

Hi Dave,
The way of market analysis that you've described could be applicable but only under fundamental factors with long term period. It is called as Intermarket analysis, and Murphy has written nice book on it (although it rather old now).
At the same time you can't make trade decisions based on "some unknown equity analysts", who said that equities will go down. Because this doesn't give you issues that you have to know for entry, particular - trend, overall context, patterns and where you will place stop, where will be your target.
Concering our situation the conclusion is quite simple - no pattern or setup - no trade. It's simple. If we see something and understand what we see - we trade it. If not - then stay flat.
But if even we will follow your conclusion about equities - we expect that EUR will fall either, but not too far and not too long (at least now).

Now about GBP. They are different currencies and have to be traded differently. Yes, they have some relation, but this is mostly due their both relation to USD. GBP has greater volatility. And I look at any pair separately - trade only if you have context. Hardly you will start trade GBP, if you have signal actually on EUR.
One thing is could be used though. For instance you have a feeling that EUR will go down, but you have a lack of patterns and neccesary context, at the same time you have strong bearish setup on GBP. This can give you some confidence on EUR bearish view. But may be it is better to trade GBP directly instead of EUR? Thus, you can restore confidence in process of your trading by looking whether GBP supports EUR action or not. But you can't enter on GBP by signal or setup on EUR.
(On GBP we now have B&B "sell" on weekly time frame, and its in progress. I've talked about it for 2 weeks already. )

So, that's my common thoughts - hope this helps.

 

[Lolly Tripathy]

1hr head & shoulders...

 

[1954]

Looks like EU is stuck within a rectangle 1.3030 to 1.3130 range. Expect a break out soon

 

[D.R.&Quinch]

Hi sive, I remember you saying you dont traDe divergence much . However, what is your view of using divergence between gbpusd and eur usd ?

 

[snegdk]

Again big THANKS for your work, Sive. Stop loss was placed to b/e as you advised. The price indeed went up first and was getting closer and closer to my s/l, but then in a second everything changed - guess some big guys pressed the sell button The price has already reached the invalidation point -and now it is close to 50% fib level and PS1 - should we have a minor retracement here?. BTW, Sive your pivot levels on 1H charts are outdated, when on 4H charts they are OK.

 

[Lolly Tripathy]

After watching the daily vdo as u said u dnt rely on 1hr bullish SG today i put another sell @ 3082......
sive sir you are my lucky charm like laughing Buddha ....
soooooooooooooo happy thanks a lot
GodBless...

 

[nepal]

Hi, Sive.
Now price is at 1.2985 after downward move. And I have two quetions:
1. Can we expect its downward continuation to 1.2920?
2. Can we put Buy limit order at 1.2920 with take profit at 1.3250? (as you wrote earlier that 1.3250 will be the target of long position).
Thank you Sive for your nice work.

 

[jboss]

Hi Sive,

Thanks so much for your analysis, is really the best! I would like to learn DiNapoli methods, Could you recommend me some links or tutorial? I would like to install their indicators (even if I have to buy it), do you know where can I found them?

Following your B&B "sell" on cable, where do you think are entry point and targets?

Thanks again...
Regards!

 

[Sive Morten]

After watching the daily vdo as u said u dnt rely on 1hr bullish SG today i put another sell @ 3082......
sive sir you are my lucky charm like laughing Buddha ....
soooooooooooooo happy thanks a lot
GodBless...

Hi Lolly,
It's better to be more cautious with what I'm saying. I also make mistakes, do not rely purely on my words...

Hi sive, I remember you saying you dont traDe divergence much . However, what is your view of using divergence between gbpusd and eur usd ?

Hi Quinch,
Actually I've talked about divergence with indicator but not inter-pair divergence. Besides, if you want to trade divergence between GBP and EUR there is a solution for that - EUR/GBP
To speak seriously, EUR/USD and Cable are different pairs and should be traded differently. They have some relation, but this mostly comes from USD, I suppose.

Hi, Sive.
Now price is at 1.2985 after downward move. And I have two quetions:
1. Can we expect its downward continuation to 1.2920?
2. Can we put Buy limit order at 1.2920 with take profit at 1.3250? (as you wrote earlier that 1.3250 will be the target of long position).
Thank you Sive for your nice work.

Hi Nepal
1. I hope so.
2. I prefer to finish one step before making second. I mean let's first get there and take profit around 1.2920, because trading market on bullish side from 1.2920 is quite different setup. It depands all tools of preparation- such as searching for patterns, market behavior around support and other.
I'm quite rare put orders blindly on some levels. Usually I wait for supporting moments that give me confidence with entry.

 

[nepal]

What are you thinking about this support line with a hammer on H4 timeframe?