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FOREX PRO Weekly August 06-10, 2012

Discussion in 'Sive Morten- Currencies and Gold Video Analysis' started by Sive Morten, Aug 4, 2012.

  1. Sive Morten

    Sive Morten Special Consultant to the FPA

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    Monthly
    Monthly trend holds bearish. Price continues to force significant support area 1.19-1.23 that held EUR twice from collapse – first time in 2008 when sub-prime crisis has started and second – in 2010 at beginning of Greece turmoil.
    August has started, but currently this candle is inside month for July and does not add much to previous analysis. So, technically situation has not changed. Minimum target still is 1.16-1.17 area, based on analysis of quarterly chart of Dollar Index that we’ve made in Nov 2011. Index has 95% correlation with EUR/USD. Also this is AB=CD target of most recent pattern on current chart. Also take a look – this is significant support of 2005 as well – marked by yellow rectangle.
    Nearest Fib resistance is 1.2593, stronger area is monthly K-resistance 1.2934. In short-term perspective some bounce to 1.25-1.26 area looks possible. Last two candles have longer shadows, so it shows that support still presents here, despite solid piercing of this area in 2010.
    In longer-term market is entering into very, say, “dangerous” area, and it comes to it not at oversold as it was two times previously. If it will break it – this will be the road to 1.07-1.10 area or ultimately even to parity.

    [​IMG]

    Weekly
    Bearish trend still holds on weekly chart, but price stands very close to its breakeven point. Here I would like to discuss couple of moments that we haven’t touched in previous researches. First of all – take a look at overall price move inside downward parallel channel. During previous bottoms, when price touched low border of the channel there were no divergences. Also we do not see any reversal patterns, when these bottoms were reached. Second moment is – market did not start move to upper border prior of reaching lower one first.
    Now take a look at current price action – we have all these signs that weren’t here previously. We have divergence, although it is not quite completed yet, we have butterfly “buy” pattern at long-term 50% monthly support and we see that market is showing attempt to do upward retracement before reaching of lower border of the channel. What conclusion could be made from all this stuff?
    Well, one part of puzzle is still absent, I think. I’m speaking about depth of current retracement. If you will take a close look at weekly chart, you’ll see that appearing some kind of bullish wedge or 3-Drive pattern is still possible. By completing of this pattern, market precisely will reach lower border and will continue movement inside of channel. But for that purpose current retracement should stop around 1.2550 area. If this will not happen, then all factors that we just have specified will come in play, and retracement could be deeper.
    Currently price stands above monthly pivot point. Take a look that MPR1=1.2642 stands very close to nearest Fib resistance. So, as we know, when market shows retracement at long-term bear trend, it retraces to MPR1.
    [​IMG]
    Daily
    On daily chart price has shown action that was assumed and discussed within the week – deep retracement after potentially bullish swing and upward continuation with breakout of bullish flag pattern. Although ECB speech has added some nervous by spike on Thursday, later price action absolutely didn’t take it into consideration and behaves as it was not here.
    So, bullish context still holds, next target, as you can clearly see from the chart is 1.25 area, that is daily K-resistance and overbought. Also, take a look – I’ve cloned previous retracement up and counted and drag it to current move up. It points at the same area. If weekly harmonic pattern still has some chances to appear – upward move should finish somewhere around 1.25-1.2550 area. Also this area agrees with WPR1 of current week and upward AB=CD pattern, although it lost its nice shape due the same spike on Thursday.

    [​IMG]
    60-min
    Trend is bullish. We will use this chart to come on board, if you haven’t entered at 1.2175 as we’ve discussed. Since daily chart is not at overboght and, actually not at any resistance, it is better to use nearest Fib support to enter long – that is 1.2326. 3x3 DMA suggests that it might be B&B “Buy” pattern or DRPO “Sell”. In case of B&B, market probably will reached 1.2326 and may be test WPP, while DRPO suggests deeper retracement, probably to K-support around 1.2285-1.2295 area. That is also aproximately a former upper border of daily flag. For stop placement there are two areas – below K-support area or below 1.2211-1.2230 – 0.618 support and WPS1. Logically, first level is more suitable, since if market will break K-support, it will return back inside of flag. That will be enough to negate bullish perspective. Second area is a bit conservative, but it will protect you from possible spikes around K-support. May be it makes sense place stop there, and when market will reestablish upward move – move stop to breakeven or below K-support.
    [​IMG]




    Conclusion:
    Long-term bearish sentiment still in play, but as current upward bounce was rather fast, market has some upward momentum that makes possible move to 1.25-1.26 area. At least currently I see nothing on charts that could make it impossible. In medium-term perspective, situation will depend on whether price stop at this area or proceed higher.
    In short-term perspective we have bullish context that should lead market to 1.25. Nice area for long entry is 1.2326, next is 1.2285-1.2295. If market will return right back below it – do not enter long, since this is not quite logical from bullish perspective.




    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.
     
  2. Sive Morten

    Sive Morten Special Consultant to the FPA

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    EUR/USD Daily Update, Tue 07, August 2012

    Good morning,
    yesterday market has shown some upward continuation and has hit daily overbought by forming nice looking spinning top pattern. That indicates that market indecision and takes some pause.

    Recall that 1.25-1.26 area is a first one where downward medium-term reversal could happen, according to weekly analysis. It means that appearing of any reversal pattern should be treated as a potential trigger of this reversal and used for short-entry. Take a look at daily time frame. Around 1.25-1.2520 area we have K-resistance, WPR1, Daily Overbought and some different Fib extension targets, including daily AB=CD.

    On 4-hour time frame market is forming some sort of pennant/triangle consolidation. My thought is that currenty not very suitable moment to enter long.

    Take a look at hourly chart. This might be butterfly "Sell", that has reversal targets at the same area. So, let it will be our first scenario. In this case - we will have to search Sell possibility around 1.25-1.2520 area. Since we also could get bearish daily directional "Stretch" pattern.
    Second scenario is some deeper downward retracement and erasing of butterfly opportunity. In this case we will have to look at 1.2290-1.2325 area for Long entry, since market should reach targets around daily K-resistance.

    That's being said - if it will be Butterfly, then search for sell possibility, while donward deeper retracement will make us search Long entry chances.
     

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    #2 Sive Morten, Aug 4, 2012
    Last edited: Aug 7, 2012
  3. Sive Morten

    Sive Morten Special Consultant to the FPA

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    EUR/USD Daily Update, Wed 08, August, 2012

    Hi there,
    today will be short comment, since situation almost is the same as yesterday. On daily time frame market has formed another doji, that also is an inside day. When market starts to form such kind of indecision overlaping candles - it is very often leads to solid move a bit later. That should happen here again, I suppose. Currently overall daily picture suggests that this move should be to the upside, at least till 1.25-1.2530 area. Mostly because there are a lot of different fib targets stand in this area.

    On 4-hour chart our butterfly has transformed a bit, but still valid, while on hourly chart we might see some kind of bullish dynamic pressure - trend stands bearish, but price forms higher lows and does not support this. This usuallly leads to upward move of different strength, but on current week it will hardly appear to be higher than 1.25-1.2530 area.

    Trading plan is the same - if upward move will happen, stick with butterfly and Sell. If market will show retracement first - look for 1.23 level, since upward move still should come and reach targets in 1.25 zone.
     

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    #3 Sive Morten, Aug 4, 2012
    Last edited: Aug 8, 2012
  4. Sive Morten

    Sive Morten Special Consultant to the FPA

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    EUR/USD Daily Update, Thu, 09, August 2012

    Hey everybody,

    Situation develops slowly. On daily TF market shows indecision price action - overlapping trading session of tight range, and all of them are stand inside of Monday's range. At the same time this could be another bullish flag or something of that sort, since price does not show significant retracement as well - it means that all longs hold their positions.

    On intraday charts market has erased our potential butterlfy pattern. Since price is not at overbought and market does not want move up - it could make some deeper retracement, that is also seems logical.
    4-hour trend is bearish. On hourly chart we could get downward AB=CD that creates an Agreement with K-area.

    In general, all will depend on this trading range. Upward breakout will mean daily continuation to 1.2550, while downward breakout will lead us to 1.2280-1.23 area. We've talked about it previously as nice area to search for long entry. I suppose that market has not done yet with upward move.
    But be aware of collapsing move down. Stand aside in this case.

    PS
    If you will take a look carefully on 4-hour chart, then you'll see that market still could form Butterfly pattern... But if it will happen - pattern will be bigger
     

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    #4 Sive Morten, Aug 4, 2012
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  5. Sive Morten

    Sive Morten Special Consultant to the FPA

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    EUR/USD Daily Update, Fri 10, August 2012

    Good morning,
    some sort of flag is continue forming on daily time frame. Although overall picture of retracement on daily chart reminds bearish wedge, currently market stands at level that does not totally deny the possibility of upward continuation. If market will not hold here - then bullish domination will fall under quetion and we will have to start talking about downward continuation probably.

    So, on 4-hour chart trend is bearish, market has hit major 0.382 support. That is normal, although currently our initial AB=CD pattern looks not so nice as before, since CD leg will be very slow. Usually this points on reversal at completment point.
    But retracement deeper - to 0.618 major support will not be normal, since market has not hit AB=CD target. That's why I tell about important level to watch.

    Hourly chart shows that we've got completement of our downward AB=CD right at K-support area. This should be significant support and market should respect it. So, if you've entered long, as we've suggested - keep this position, while if you only intend to do that - check, will market form any bullish reversal patterns here. Probably some sort of butterfly buy could appear.
    Move your stops at breakeven as soon as possible, since market stands at the edge. Downward breakout through this K-support will be bad for bulls' perspective.
    Also, take a look - I draw a target of rectangle breakout. It stands at the same area of 1.2250 as potential butterfly.
    That's being said, keep an eye on this level. We do not want to see fast acceleration through 1.2250, but want to see upward pullback and continuation as suggested normal price action during bullish context.
     

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    #5 Sive Morten, Aug 4, 2012
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  6. papao

    papao Private, 1st Class

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    Hi Sive and thank you for your weekly review. I'm writing also for asking news about the Sentiment system project of FPA: is FPA still working at it? Are they experiencing some difficulties on it? (if so, i can help describing with great detail how should it work, and i can also code same example using excel (just for explain better the logic)).
    Thank you sive. Have a great weekend :)
     
  7. jerry mtini

    jerry mtini Private

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    Hi everyone

    Does anyone know of someone who can help with an EA that does not work properly?

    I use a strategy that requires "bouncing" trades off an SMA and found an EA to automatically do that but it doesn't work properly!

    Thanks for any help!
     
  8. Synchronicity

    Synchronicity Sergeant

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    Hi

    Im happy to have a look. Send me PM with a copy and a description of how it should work and whats wrong
    and Ill see what I can do.

    Michael
     
  9. Marketjoy Trader

    Marketjoy Trader Private, 1st Class

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    Thanks Sive for the analysis. I would like to know if you are following the Brian Craig and the FPA on his trading system? When are we going to be able to access it?
     
  10. craig bryan

    craig bryan Private, 1st Class

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    trading plan

    Hi Ayoayo....

    Here's the links for my trading plan & login to join.me..........

    Because of the confusion last week you will have to enter a screen name to login ;)
    if there is any problem with downloading the pdf...let me know & I'll fire up join.me & send the file that way

    View attachment 6267

    https://secure.join.me/FX20-20.scalping

    BTW Sive good analysis ....as per usual....:cool:
     

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