Sive Morten
Special Consultant to the FPA
- Messages
- 18,644
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. In general, we can say, that market is locked between Agreement support and Confluence resistance area.
Recall that 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. Overall price action looks so, that does not care any hidden hazard for bearish sentiment. Price stands in a tight range after significant thrust down. This is very common and nice situation for bears.
From bearish perspective 1.37 K-level has extreme importance 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’m sure that you remember this chart well, since we discuss it again and again every week. By today’s research we just notify that bullish sentiment on weekly chart holds. It confirms by following issues:
- trend – it holds bullish;
- Potential Gartley’s “222” Buy pattern. Small retracement, just to 50% support of initial move up also adds confidence with bullish strength.
As a result, we can count on upward AB=CD move, that, as we’ve suggested, will become deeper retracement on monthly time frame. This pattern has two potential targets. First one stands at 1.3525-1.3530 area. This is 0.618 extension and it also creates an Agreement with weekly Confluence resistance area. This will be really tough resistance zone.
If market will pass through it, next target stands at 1.3855-1.3860 area that also creates an Agreement with 1.3814 Fib resistance level. That level is also crucial from monthly perspectives. Since we treat this AB=CD potential move as retracement in long-term bearish picture, we assume that this weekly AB=CD should finish either on first target or on second. If this will not happen, then we will have to reassess our view on long-term picture.
Daily
This chart is full of riddles for me and reason for that is bearish wedge pattern that has not been broken yet by market in any direction. Another reason is that I still keep in mind downward AB=CD pattern with target at 1.2850-1.29 area. Once we’ve thought that probably this pattern has been completed since market has turned up after hitting just 0.618 AB=CD target. But take a look how it has turned up – by bearish wedge pattern. So, the riddle is as follows. Is current move up starting motion to upward or just retracement after hitting of support and we will see first downward breakout, may be even 1.2850-1.29 and only after that real move up will start?
There are points on both sides of the riddle. On the bullish side we see upward trend and break of daily Confluence resistance level, that is not very typical for weak market. Also take a look – market finally left the range of previous Friday thrusting bar.
On bearish side we have wedge pattern itself, way of price action – it definitely has retracement nature, since we do not see any thrusting attempts, but only choppy and sloppy price action inside of wedge. Also, at least theoretically downward AB=CD pattern has not been canceled yet. The most frustrating issue is that based on current picture we can’t resolve this riddle. We need more hints, may be even breakout of the wedge to tell where market might be going.
4-hour
Here we see the same chart as during the whole previous week and we will continue to do magic with this bearish wedge. Although this picture is the same, there are new nuances has appeared that could help as in the beginning of the next week. They are Weekly Pivots. Take a look that WPP stands at 1.3206 right at nearest Fib support, while WPS1 stands slightly lower 4-hour 1.3165 Confluence support. That is our chance. What possible scenarios could happen? First is and most simple – upward breakout of the wedge and move above WPR1 1.3308. In this case we can say: “Yes, probably weekly AB=CD move to 1.3520 has started”. I mean true breakout, of cause.
The more tricky way is popping and jumping on supports levels. First support coincides with lower body of the wedge. If market will hold there they will simultaneously hold as bullish sentiment (since it will remain above WPP) as potential for upper breakout. But major level to watch is Confluence support and WPS1. Downward breakout will lead to further acceleration, because breaking WPS1 usually indicates appearing of the trend and this could be some clue for daily riddle solution.
Hourly
You know, guys, I like this stuff, I mean harmonic numbers. Once we have already discussed them partially when talked about side-by-side butterflies. Tops stand at 1.27 and 1.618 ratios. Harmony is very helpful, when you want to catch the finish moment of the move and usually finish point coincide with breaking of harmony. Take a look at chart. First, I want to note that market has reached classical resistance level as well, that was the neckline of Double Top pattern. Second, take a look at blue and lime lines. I’ve cloned them, so that they have the same angle and length. Then I’ve dragged and dropped them on market swings. I think you’ve got the point – all swings are very similar. Once market will break this similarity and this will be the first bell of possible drastic changes on price behavior.
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.
On short-term chart we do not have absolutely clear picture, mostly because of wedge consolidation and some contradictive moments in price behavior. So our major task in the beginning of the week will be monitor support levels at 4-hour time frame (as it was explained above) and harmonic swings on hourly chart. I hope that it will help us to catch market intention early – as soon as any signs will appear.
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. In general, we can say, that market is locked between Agreement support and Confluence resistance area.
Recall that 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. Overall price action looks so, that does not care any hidden hazard for bearish sentiment. Price stands in a tight range after significant thrust down. This is very common and nice situation for bears.
From bearish perspective 1.37 K-level has extreme importance 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’m sure that you remember this chart well, since we discuss it again and again every week. By today’s research we just notify that bullish sentiment on weekly chart holds. It confirms by following issues:
- trend – it holds bullish;
- Potential Gartley’s “222” Buy pattern. Small retracement, just to 50% support of initial move up also adds confidence with bullish strength.
As a result, we can count on upward AB=CD move, that, as we’ve suggested, will become deeper retracement on monthly time frame. This pattern has two potential targets. First one stands at 1.3525-1.3530 area. This is 0.618 extension and it also creates an Agreement with weekly Confluence resistance area. This will be really tough resistance zone.
If market will pass through it, next target stands at 1.3855-1.3860 area that also creates an Agreement with 1.3814 Fib resistance level. That level is also crucial from monthly perspectives. Since we treat this AB=CD potential move as retracement in long-term bearish picture, we assume that this weekly AB=CD should finish either on first target or on second. If this will not happen, then we will have to reassess our view on long-term picture.
Daily
This chart is full of riddles for me and reason for that is bearish wedge pattern that has not been broken yet by market in any direction. Another reason is that I still keep in mind downward AB=CD pattern with target at 1.2850-1.29 area. Once we’ve thought that probably this pattern has been completed since market has turned up after hitting just 0.618 AB=CD target. But take a look how it has turned up – by bearish wedge pattern. So, the riddle is as follows. Is current move up starting motion to upward or just retracement after hitting of support and we will see first downward breakout, may be even 1.2850-1.29 and only after that real move up will start?
There are points on both sides of the riddle. On the bullish side we see upward trend and break of daily Confluence resistance level, that is not very typical for weak market. Also take a look – market finally left the range of previous Friday thrusting bar.
On bearish side we have wedge pattern itself, way of price action – it definitely has retracement nature, since we do not see any thrusting attempts, but only choppy and sloppy price action inside of wedge. Also, at least theoretically downward AB=CD pattern has not been canceled yet. The most frustrating issue is that based on current picture we can’t resolve this riddle. We need more hints, may be even breakout of the wedge to tell where market might be going.
4-hour
Here we see the same chart as during the whole previous week and we will continue to do magic with this bearish wedge. Although this picture is the same, there are new nuances has appeared that could help as in the beginning of the next week. They are Weekly Pivots. Take a look that WPP stands at 1.3206 right at nearest Fib support, while WPS1 stands slightly lower 4-hour 1.3165 Confluence support. That is our chance. What possible scenarios could happen? First is and most simple – upward breakout of the wedge and move above WPR1 1.3308. In this case we can say: “Yes, probably weekly AB=CD move to 1.3520 has started”. I mean true breakout, of cause.
The more tricky way is popping and jumping on supports levels. First support coincides with lower body of the wedge. If market will hold there they will simultaneously hold as bullish sentiment (since it will remain above WPP) as potential for upper breakout. But major level to watch is Confluence support and WPS1. Downward breakout will lead to further acceleration, because breaking WPS1 usually indicates appearing of the trend and this could be some clue for daily riddle solution.
Hourly
You know, guys, I like this stuff, I mean harmonic numbers. Once we have already discussed them partially when talked about side-by-side butterflies. Tops stand at 1.27 and 1.618 ratios. Harmony is very helpful, when you want to catch the finish moment of the move and usually finish point coincide with breaking of harmony. Take a look at chart. First, I want to note that market has reached classical resistance level as well, that was the neckline of Double Top pattern. Second, take a look at blue and lime lines. I’ve cloned them, so that they have the same angle and length. Then I’ve dragged and dropped them on market swings. I think you’ve got the point – all swings are very similar. Once market will break this similarity and this will be the first bell of possible drastic changes on price behavior.
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.
On short-term chart we do not have absolutely clear picture, mostly because of wedge consolidation and some contradictive moments in price behavior. So our major task in the beginning of the week will be monitor support levels at 4-hour time frame (as it was explained above) and harmonic swings on hourly chart. I hope that it will help us to catch market intention early – as soon as any signs will appear.
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.