Sive Morten
Special Consultant to the FPA
- Messages
- 18,564
Monthly
On monthly chart trend holds bearish. Almost 4th month in a row market stands in consolidation after hitting of Agreement around 1.2950-1.30 area. Since Agreement is stronger area than just simple Fib level we have suggested that market could show some deeper retracement up and retest 1.37-1.38 level. Current price action on weekly chart shows that this indeed could happen.
Still our long term expectation is dollar appreciation to 1.16 level and move to 1.37 will be treated just as retracement in a bearish monthly trend.
The rest of analysis is the same – our focus is 1.37 K-level as holding barrier. We can accept reaching of 1.37 from long-term bearish view, but we anyhow can’t justify move through it. If it will really happen, I mean breakout through 1.37, then it will put under question overall bearish view on long-term charts.
Weekly
I intentionally hold the same chart week by week, so that we can track our forecast on market price action. In general our view is still correct, but we were wrong in nuances. General is Gartley “222” Buy pattern. Recall that initially we thought that it should be 1-let retracement and just AB=CD move to the upside. Later it has shifted to more complex smaller ab=cd downward retracement and we’ve come to “222” pattern. But “222” allows to ab-cd has different destination – as 0.618 as 1.27 or even 1.618. The major restriction is ab=cd should hold inside of initial upward swing.
By nice upward weekly candle, we probably could acknowledge the fact that I’ve missed a bit with retracement depth. I’ve expected that it should be as 1.0 ab=cd, but recent price action shows that now there is more chances that it has completed and is just 0.618 ab=cd. This adds bullishness to picture on weekly chart and gives more confidence with AB-ab-cd-CD move to 1.38 area. We’ll see…
Also, probably it’s a bit too brave to state about move to 1.38, but move to 0.618 target at 1.3510 seems possible.
Daily
Finally we have something definite on daily time frame. Despite all efforts and standing around WPP and lower border of triangle for considerable period of time, bears have given up. Will it be total victory or just pause we will see, but now market confirms short-term bullish context. Although price action has canceled Butterfly pattern, but bar in yellow circle simultaneously is bullish wash and rinse. As we’ve said on Friday – we need thrust to make a decision and right on Friday market has shown this upward attempt. Another moment is that market moved above of WPR1 at previous week, and, take a look – almost has broken through daily 1.3180-1.3232 resistance level (probably we can treat it as Confluence resistance, but it’s a bit wide). And of cause – trend has turned bullish.
Now chances that market still will show move to 1.29 by AB=CD are melting. Looks like that will be weekly “222” with just 0.618 inner ab=cd pattern. If you assumption is correct we should be prepared for move at least to 1.3520 or even to 1.38, depending on what AB=CD move up will be – 0.618 or 1.0.
4-hour
This time frame is particularly important for us on coming week. First is because we need retracement to enter long (recall – “Buy deeps and sell rallies”) and this time frame gives us total information – when retracement will start and what levels to watch for.
1.3240-1.3250 is significant level. It includes 0.618 daily resistance, 1.618 butterfly reversal target, and target of AB=CD pattern, that includes butterfly as CD leg. Trend is strongly bullish and it will hold bullish till K-support at 1.3130-1.3140 area. 1.3147 is WPP. So, major area for entry long is 1.3130-1.3147. Another level that seems suitable is 1.3165. The reason why I show this one also is because market is not at overbought on daily time frame. If bulls are really in charge, market could show just light retracement and continue move up. So, if we will be able to enter at 1.3130 – that will be perfect, but it could happen that we just will not see such deep move down.
Also, if you will take a care look at this chart – you’ll see that this is almost a cloned picture of weekly perspective. Look, initial thrust as AB leg, then downward smaller ab=cd move that creates butterfly and has not quite reached 1.0 extension (as on daily now) and fast acceleration. Particularly this fast acceleration to 1.38 area we wait for. Whole that price action creates compound AB-ab-cd-CD pattern. The first part, by the way is also “222” Buy…
Hourly
Hourly chart gives more details. 1.3245 is 1.618 target of most recent AB=CD pattern and this level coincides with 1.618 extension of Butterfly. On hourly chart we see solid Friday’s upward thrust that could give us context for DRPO “Sell” pattern.
Conclusion:
Long-term traders should sit on hands and wait when weekly AB=CD retracement will be over to enter short, or at least market will shift trend to bearish on weekly.
Recall that weekly context is bullish, market has turned to compounding AB=CD patterns. Daily chart finally has reached some clarity and turned on bullish side.
Major idea for Monday is as follows:
1. Wait of reaching 1.3245-1.3250 area;
2. Be prepared for appearance of DRPO “Sell” or other reversal patterns there. IF you’re scalper you may try to trade it;
3. Watch for 1.3165 level and 1.3130-1.3140 K-support to enter long. Probably it’s better to apply gradual entry with 1/3 at 1.3165 area and 2/3 at 1.3135 area or apply 50/50 entry – that is up to you.
4. Potential target should be at minimum 1.3510.
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.
On monthly chart trend holds bearish. Almost 4th month in a row market stands in consolidation after hitting of Agreement around 1.2950-1.30 area. Since Agreement is stronger area than just simple Fib level we have suggested that market could show some deeper retracement up and retest 1.37-1.38 level. Current price action on weekly chart shows that this indeed could happen.
Still our long term expectation is dollar appreciation to 1.16 level and move to 1.37 will be treated just as retracement in a bearish monthly trend.
The rest of analysis is the same – our focus is 1.37 K-level as holding barrier. We can accept reaching of 1.37 from long-term bearish view, but we anyhow can’t justify move through it. If it will really happen, I mean breakout through 1.37, then it will put under question overall bearish view on long-term charts.
Weekly
I intentionally hold the same chart week by week, so that we can track our forecast on market price action. In general our view is still correct, but we were wrong in nuances. General is Gartley “222” Buy pattern. Recall that initially we thought that it should be 1-let retracement and just AB=CD move to the upside. Later it has shifted to more complex smaller ab=cd downward retracement and we’ve come to “222” pattern. But “222” allows to ab-cd has different destination – as 0.618 as 1.27 or even 1.618. The major restriction is ab=cd should hold inside of initial upward swing.
By nice upward weekly candle, we probably could acknowledge the fact that I’ve missed a bit with retracement depth. I’ve expected that it should be as 1.0 ab=cd, but recent price action shows that now there is more chances that it has completed and is just 0.618 ab=cd. This adds bullishness to picture on weekly chart and gives more confidence with AB-ab-cd-CD move to 1.38 area. We’ll see…
Also, probably it’s a bit too brave to state about move to 1.38, but move to 0.618 target at 1.3510 seems possible.
Daily
Finally we have something definite on daily time frame. Despite all efforts and standing around WPP and lower border of triangle for considerable period of time, bears have given up. Will it be total victory or just pause we will see, but now market confirms short-term bullish context. Although price action has canceled Butterfly pattern, but bar in yellow circle simultaneously is bullish wash and rinse. As we’ve said on Friday – we need thrust to make a decision and right on Friday market has shown this upward attempt. Another moment is that market moved above of WPR1 at previous week, and, take a look – almost has broken through daily 1.3180-1.3232 resistance level (probably we can treat it as Confluence resistance, but it’s a bit wide). And of cause – trend has turned bullish.
Now chances that market still will show move to 1.29 by AB=CD are melting. Looks like that will be weekly “222” with just 0.618 inner ab=cd pattern. If you assumption is correct we should be prepared for move at least to 1.3520 or even to 1.38, depending on what AB=CD move up will be – 0.618 or 1.0.
4-hour
This time frame is particularly important for us on coming week. First is because we need retracement to enter long (recall – “Buy deeps and sell rallies”) and this time frame gives us total information – when retracement will start and what levels to watch for.
1.3240-1.3250 is significant level. It includes 0.618 daily resistance, 1.618 butterfly reversal target, and target of AB=CD pattern, that includes butterfly as CD leg. Trend is strongly bullish and it will hold bullish till K-support at 1.3130-1.3140 area. 1.3147 is WPP. So, major area for entry long is 1.3130-1.3147. Another level that seems suitable is 1.3165. The reason why I show this one also is because market is not at overbought on daily time frame. If bulls are really in charge, market could show just light retracement and continue move up. So, if we will be able to enter at 1.3130 – that will be perfect, but it could happen that we just will not see such deep move down.
Also, if you will take a care look at this chart – you’ll see that this is almost a cloned picture of weekly perspective. Look, initial thrust as AB leg, then downward smaller ab=cd move that creates butterfly and has not quite reached 1.0 extension (as on daily now) and fast acceleration. Particularly this fast acceleration to 1.38 area we wait for. Whole that price action creates compound AB-ab-cd-CD pattern. The first part, by the way is also “222” Buy…
Hourly
Hourly chart gives more details. 1.3245 is 1.618 target of most recent AB=CD pattern and this level coincides with 1.618 extension of Butterfly. On hourly chart we see solid Friday’s upward thrust that could give us context for DRPO “Sell” pattern.
Conclusion:
Long-term traders should sit on hands and wait when weekly AB=CD retracement will be over to enter short, or at least market will shift trend to bearish on weekly.
Recall that weekly context is bullish, market has turned to compounding AB=CD patterns. Daily chart finally has reached some clarity and turned on bullish side.
Major idea for Monday is as follows:
1. Wait of reaching 1.3245-1.3250 area;
2. Be prepared for appearance of DRPO “Sell” or other reversal patterns there. IF you’re scalper you may try to trade it;
3. Watch for 1.3165 level and 1.3130-1.3140 K-support to enter long. Probably it’s better to apply gradual entry with 1/3 at 1.3165 area and 2/3 at 1.3135 area or apply 50/50 entry – that is up to you.
4. Potential target should be at minimum 1.3510.
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.