FOREX PRO WEEKLY, April 30 - May 04, 2018

[tun13]

Thank you my Awesome teacher. You are the best of bests.

Morning, everybody

So, let's take a look again on EUR. On daily chart we still do not see big changes, as our yesterday discussion mostly was focused on intraday patterns.
Still, on daily we need to keep in mind recent thrust down. If EUR will re-test broken 1.2150 lows - we could get B&B "Sell" and good opportunity to go short. Our next destination here is 1.1930-1.1950 area.
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On 4H EUR has hit our predefined XOP very accurately and now it seems some retracement is ready to start. Major attention we should pay to 1.2145 K-resistance, because this is an area where daily B&B potentially could start, if, of course, EUR will complete other B&B conditions.
Second trading setup here is most recent leg down. Here it looks small, but this is just in comparison with whole thrust. In reality, it is also sufficient for B&B trade, because it has also 8 bars down. But it probably will be rather fast.
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Finally, those of you, who have taken long position by our 1H butterfly - need to care about position. Think about moving stops to breakeven. Although potentially EUR could reach 1.2140, but still, long position right now stands against major tendency and it would be better to keep it safe and highly protected.

Deep retracement doesn't look curious here, guys, because investors could take some profit before NFP as plunge was really significant:
View attachment 37351

 

[Sive Morten]

Good morning, everybody

So, back to EUR again... EUR shows very weak reaction on any intraday support or target. This just tells how EUR is weak right now or, better to say how USD is strong. On daily chart, we're coming to our major target that includes 1.19 K-area and 1.1830 daily XOP. It seems that hardly any meaningful retracement will happen, until price will hit this area, either NFP will be rather poor.

Reaction on our 4H XOP was very shy. Now market has reached last intermediate target - Butterfly's 1.618 extension. It's also accompanied by daily OS and MPS1:

In normal situation, butterfly is treated as worked properly if market shows at least 3/8 retracement. In our case, EUR should reach 1.2120 area. But take a look at reaction on daily OP and 1.27 extension - it was very weak. That's why currently we also have reasonable doubts that any solid bounce will happen. Besides - EUR keeps very well harmonic retracement swing here.

On hourly chart price stands inside the channel. Once it will be broken up - it could mean that deeper retracement up is started:

Here guys, our trading plan suggests following points:
1. We're watching for 3/8 upside retracement and daily B&B "Sell" - this is longer-term point, as we've discussed yesterday;
2. If you would like to take short position with current downside action - watch for bearish continuation patterns on retracement swing. As a rule, this is "222" Sell" pattern on 15-min charts. Use harmonic number to control possible reversal point. If market will break the channel - this will be clear signal that tendency is over.
3. If you would like to make scalp counter trend trades (although we do not support this idea) - as we've talked yesterday around XOP. You need to get important Fib support or extension on daily/4H, bullish reversal pattern on 1H. They will give you at least some protection. Also - move stops to b/e asap. Bright example is yesterday's butterfly around 4H XOP. Although EUR has not show solid retracement, but minor upside bounce let us to protect position.

 

[Robban68]

1.20-1.2055 is strong area in my book for a potential bounce. How strong still to be proven. When it drop and close below 2104 it should Continue to drop to 1.191/1.173 but needs to overcome 1.20-1.2055. A better sell is 1.225/1.238 for 1.19x/1.173.

1.2075 could have a shot since it has not been played yet. A short in the area 1.2075/1.2105 for 1.191 could be considered. NFP tomorrow can make some firework

 

[Sive Morten]

Greetings everybody,

So, guys today it all about NFP release. Here is some investors' thoughts, published by Reuters:

Nonfarm payrolls probably increased by 192,000 jobs last month, according to a Reuters survey of economists. Payrolls rose by 103,000 positions in March, the smallest gain in six months, which economists dismissed as payback after unseasonably mild weather boosted hiring in February.

Average hourly earnings are expected to have risen 0.2 percent last month. That would leave the annual increase in average hourly earnings at 2.7 percent, steady from the pace recorded in March.

If the U.S. data points to solid wage growth, the dollar is likely to rise, especially against the euro, said Stephen Innes, head of trading in Asia-Pacific for Oanda in Singapore.

“If...wages come out a little bit stronger than expected, I think the euro tests $1.19,” Innes said."

And here is a bit farer perspective, which also has relation to our view either:

Gerhard Schwarz, Head of Equity & Cross Asset Strategy at Baader Bank in Munich, the currency outlook for corporate Europe looked favorable, even though overall earnings growth was set to slow compared to 2017 due the slowing economic growth.

“There is a good chance the euro would weaken again,” he said, saying the currency could reach $1.12-1.15 during the second half of the year, likely bolstering corporate earnings, although any lift could be delayed by hedging policies.

“The euro has certainly has been profiting from expectations the ECB will tighten policy following the Fed’s path but this, I think, will be subdued and take place much later that consensus expects,” he added.

Technically, market stands in the same area, but price action suggests no meaningful retracement by far. As you remember, yesterday we've talked about three possible trades. First is - B&B "Sell" on daily chart. It means that we will not get it probably until market will hit major target and support cluster of XOP and K-area.
Today we could talk only on 1.1890 target, because 1.1877 is daily OS. Only superb NFP and wage data could push EUR through OS area right to XOP:

4H shows a kind of bearish dynamic pressure, keeps harmonic retracement very well. Price action also doesn't look like thrust. All this stuff points on possibe downside continuation. So it is not time yet for counter trend positions:

Finally, 3rd time of trades here is joining with current tendency. Yesterday we've said that you need to get some bearish continuation pattern at the top of harmonic retracement.

We do not have "222" Sell, but we have potential Butterfly "Buy" with target precisely around 1.1890 and daily OS on 1H chart:

That's being said, NFP probably will be either positive or neutral, and this week should close by another downside leg to 1.1890-1.19 area. Reaching of daily XOP @ 1.1830 is possible, but only if NFP will be outstanding.