FOREX PRO Weekly August 15-19, 2011

[INVESTOR]

Greetings Sive...!!!

Good morning Sive, it's a real pleasure having you around. Your insights and teachings are some of the most valuable time I can spend on. Highly appreciated, as always. Thank you for teachings us how to fish...!

Now, since I know you'll find some time to read this, I want to participate in the current conversation regarding the fate on the EUR-USD,
both, fundamentally and my 1 cent technical.

Fundamentally, I'm just going to re-post a very interesting point of view from an old timer FX Bank Trader that I happen to bump into, and to me, his
words make a lot of sense. Sounds "right" to my "gut".

Technically, since you said to us on this weekly analysis to turn on our imagination switch, that's what I've done... and the results I REALLY
LIKE...!!!

You see, I truly believe in the Harmonic Patterns and Fibonacci Analysis. These two combined had prove me over and over to work like a charm 90.0% of the time.
When you mentioned in the Daily H&S analysis: "...look at price action during the last week – it’s not very common for H&S – market just could not
choose the direction, it has shown very volatile days with closes preferably in the middle of the trading days..." It got me go to my daily charts and
make sense of last week PA. We all know what happened and why it moved like that now. US Debt Ceiling, US Credit Rating Downgrade, EU's own problems, etc... I believe that if all those events wouldn't happened the H&S could develop as you previously said. But things happen for some reason...
Call me crazy, but in the charts I'm posting we can see why... The Beautiful Harmonic Pattern that is being form wouldn't have a chance...
Now, it sure does....!!! Would it complete itself? I dont know, but that there's a chance for it, it sure is that that chance is there... My bet is that it
will happen...!!!

Here: Candles On:

Here: No Candles:

Here it is the Final Work:

Now, here I share the Fundamental view of the FX Bank Trader:

"I’m an old-timer, having been an FX bank trader since early 1970s. The Swiss have a financial heritage of monetary independace for the rest of Europe. The country has done very well as a result, avoiding the Eurozone financial calamity that has been brewing since its formation and single-currency adoption in 1999.

On the Euro’s destiny?…The fiscal convergence that was hoped for with the adoption of the single-curreny across 17 countries is a remarkable failure. These member countries have too fundamentally diverse social policies, banking policies, public sector entitlement policies, and no central Treasury that compels federal budget balancing mandates. Hence, at some point, the smaller weaker countries, without ingrained fiscal discipline, will need to exit the Euro as their currency.

Until this happens, Germany and France, by default, are the financial anchors or perceived “deep pockets” of the ECB financial guarantee process. Both countries are desparately seeking balanced budget mandates or amendments from Italy and Spain…if that happens very quickly, at least the Eurozone, less the likely departures of a few small weak countries, will regain sound financial footing. I think this will happen…soon. We will see a “Hard Euro” currency as a result. Remember the Deutchemark!

As for the Swiss… In my estimation, the prospect of pegging the Swiss Franc to the Euro is very inviting and a “wonderful gift” to European equity investors, myself included, that hold a lot of Northern European country Euro denominated company shares….no banks though.

Here is what I see. With SF pegged to Euro, and likely with a moderate plus/minus 2% flex band, it results in the Swiss unwittingly supporting Euro region financial stability. Because, whenever the Euro will get “hammered” due to Euro financial system fears, the Swiss National Bank will have to “Buy Euro and sell SF”. In essence, the SF is indirectly “joining the Euro currency block” (but maintaining “right of withdrawal and right of parity adjustment”) and adding all their central bank financial might to “protect the Euro from falling against Swissy”.

The Swiss I’ve known for decades to be a financially greedy group of bastards (mavericks) in Europe, standing alone against all the Euro financial turbulence. Maybe the “greed factor today” to dampen the upside of SF, is unwittingly making them a “life preserver” to the Eurozone at-large? Certainly, if they elect to peg SF to the Euro it is indeed a vote of confidence in the viability of the single-currency concept, less the few weak small countries that can hopefully make a “quiet exit, sometime soon.

Are there any old FX traders out there with a shared or different view? Send me an email…Thanks"...

My 1 cent Sive... Regards

This from the http://www.telegraph.co.uk/finance/financialcrisis/8701227/Global-debt-crisis-Markets-enter-new-danger-zone.html The Telegraph. George Soros commentary:
George Soros, the US investor, told Der Spiegel that the only solution for Europe might be for Greece and Portugal to quit the European Union. "The EU and the euro would survive it," he was reported to have said.

 

[Hasan11]

Hi Sive,

Thank you again for your efforts..

I think that you have also confused regarding pattern appeared in daily time frame chart.

in your weekly chart you define it as a flag pattern but in daily chart you define it as descending triangle..?

In an uptrend, flag pattern is mostly bullish as a corrective action. but in the same trend, descending triangle which is mostly bearish may be a reversal pattern as well..

At the same time , it is very strange that 200EMA curve also overlap with the triangle bottom as a big support at 1,4034 point. You can see in the picture i posted.

In most cases 200EMA works perfectly as support and resistance as you see in this picture.

No doubt that if this bottom point of triange would be broken down. A big bearish movement can come..

Whats your opinion?

Best Regards..

 

[Geert Anthonis]

...
Call me crazy, but in the charts I'm posting we can see why... The Beautiful Harmonic Pattern that is being form wouldn't have a chance...
Now, it sure does....!!! Would it complete itself? I dont know, but that there's a chance for it, it sure is that that chance is there... My bet is that it
will happen...!!!

Here: Candles On:

Here: No Candles:

Here it is the Final Work:

Dear Investor,

You seem to bring some interesting points to the table but as you can see your Charts did not make it to the website. So we can see what you mean could you please post them again.

Thank you.

 

[Sive Morten]

Good morning Sive, it's a real pleasure having you around. Your insights and teachings are some of the most valuable time I can spend on. Highly appreciated, as always. Thank you for teachings us how to fish...!

Now, since I know you'll find some time to read this, I want to participate in the current conversation regarding the fate on the EUR-USD,
both, fundamentally and my 1 cent technical.

Fundamentally, I'm just going to re-post a very interesting point of view from an old timer FX Bank Trader that I happen to bump into, and to me, his
words make a lot of sense. Sounds "right" to my "gut".

Technically, since you said to us on this weekly analysis to turn on our imagination switch, that's what I've done... and the results I REALLY
LIKE...!!!

You see, I truly believe in the Harmonic Patterns and Fibonacci Analysis. These two combined had prove me over and over to work like a charm 90.0% of the time.
When you mentioned in the Daily H&S analysis: "...look at price action during the last week – it’s not very common for H&S – market just could not
choose the direction, it has shown very volatile days with closes preferably in the middle of the trading days..." It got me go to my daily charts and
make sense of last week PA. We all know what happened and why it moved like that now. US Debt Ceiling, US Credit Rating Downgrade, EU's own problems, etc... I believe that if all those events wouldn't happened the H&S could develop as you previously said. But things happen for some reason...
Call me crazy, but in the charts I'm posting we can see why... The Beautiful Harmonic Pattern that is being form wouldn't have a chance...
Now, it sure does....!!! Would it complete itself? I dont know, but that there's a chance for it, it sure is that that chance is there... My bet is that it
will happen...!!!


Now, here I share the Fundamental view of the FX Bank Trader:

"I’m an old-timer, having been an FX bank trader since early 1970s. The Swiss have a financial heritage of monetary independace for the rest of Europe. The country has done very well as a result, avoiding the Eurozone financial calamity that has been brewing since its formation and single-currency adoption in 1999.

On the Euro’s destiny?…The fiscal convergence that was hoped for with the adoption of the single-curreny across 17 countries is a remarkable failure. These member countries have too fundamentally diverse social policies, banking policies, public sector entitlement policies, and no central Treasury that compels federal budget balancing mandates. Hence, at some point, the smaller weaker countries, without ingrained fiscal discipline, will need to exit the Euro as their currency.

Until this happens, Germany and France, by default, are the financial anchors or perceived “deep pockets” of the ECB financial guarantee process. Both countries are desparately seeking balanced budget mandates or amendments from Italy and Spain…if that happens very quickly, at least the Eurozone, less the likely departures of a few small weak countries, will regain sound financial footing. I think this will happen…soon. We will see a “Hard Euro” currency as a result. Remember the Deutchemark!

As for the Swiss… In my estimation, the prospect of pegging the Swiss Franc to the Euro is very inviting and a “wonderful gift” to European equity investors, myself included, that hold a lot of Northern European country Euro denominated company shares….no banks though.

Here is what I see. With SF pegged to Euro, and likely with a moderate plus/minus 2% flex band, it results in the Swiss unwittingly supporting Euro region financial stability. Because, whenever the Euro will get “hammered” due to Euro financial system fears, the Swiss National Bank will have to “Buy Euro and sell SF”. In essence, the SF is indirectly “joining the Euro currency block” (but maintaining “right of withdrawal and right of parity adjustment”) and adding all their central bank financial might to “protect the Euro from falling against Swissy”.

The Swiss I’ve known for decades to be a financially greedy group of bastards (mavericks) in Europe, standing alone against all the Euro financial turbulence. Maybe the “greed factor today” to dampen the upside of SF, is unwittingly making them a “life preserver” to the Eurozone at-large? Certainly, if they elect to peg SF to the Euro it is indeed a vote of confidence in the viability of the single-currency concept, less the few weak small countries that can hopefully make a “quiet exit, sometime soon.

Are there any old FX traders out there with a shared or different view? Send me an email…Thanks"...

My 1 cent Sive... Regards

This from the Global debt crisis: Markets enter 'new danger zone' - Telegraph The Telegraph. George Soros commentary:
George Soros, the US investor, told Der Spiegel that the only solution for Europe might be for Greece and Portugal to quit the European Union. "The EU and the euro would survive it," he was reported to have said.

Hi Investor,
you're right, I also look at those butterfly that you've drawn. But as you can see - there is another opposite exists as well.
I think that current contracdictive picture reflects the same contradictive fundamental environment.
Many people like to make loud and curious radical statements in such periods, because they think that they know more than, say Trichet or chairman of Bundes Bank. Experience tells me that it's better to look at that statements with healthy part of suspicion.
Concerning Swiss Franc - yes, this is well known situation and common - JPY and CHF are save-haven currencies and both of the could come to reagular interventions if currently growth will not stop. And as we said in weekly research month ago - it hardly will happen in nearest future.

Hi Sive,

Thank you again for your efforts..

I think that you have also confused regarding pattern appeared in daily time frame chart.

in your weekly chart you define it as a flag pattern but in daily chart you define it as descending triangle..?

In an uptrend, flag pattern is mostly bullish as a corrective action. but in the same trend, descending triangle which is mostly bearish may be a reversal pattern as well..

At the same time , it is very strange that 200EMA curve also overlap with the triangle bottom as a big support at 1,4034 point. You can see in the picture i posted.

In most cases 200EMA works perfectly as support and resistance as you see in this picture.

No doubt that if this bottom point of triange would be broken down. A big bearish movement can come..

Whats your opinion?

Best Regards..

Now you understand our recommendation that the safe way to trade current market - wait for breakout.
Our confusion appears because now we see some important pattern but do not see yet clues or hints that allow us to make a conclusion about breakout direction with confidence.

Speaking about triangle, I post 2002 picture with thought to show that such kind of triangle still has not bad chances for upward breakout. And that will be in a row with monthly flag.
We just have to wait a bit...

 

[gibson]

Thanks so much

Thanks for this great analysis Mr Sive.

Please I would like to know where to get Joe DiNapoli's book.

I would like to read it...Somebody Help.

God Bless.

 

[Icarus]

Thanks for this great analysis Mr Sive.

Please I would like to know where to get Joe DiNapoli's book.

I would like to read it...Somebody Help.

God Bless.

You can buy the book from Mr. DiNapoli's company, Coast Investment Softawre here:
Coast Investment Software Inc.

 

[Icarus]

Good morning Sive, it's a real pleasure having you around. Your insights and teachings are some of the most valuable time I can spend on. Highly appreciated, as always. Thank you for teachings us how to fish...
.

It is best to not make the charts so large when you post them please.

 

[jkgoh]

Thanks Sive for August 15

Hi. Mr. Sive,

Price moves as according to your analysis. Thanks a lot.

 

[john Garbett]

1.4925 area

Hi Sive
Firstly, many thanks for your ongoing assistance in helping me make some money on the EUR/USD pair. It is very much appreciated.

My question is about the 1.4925 area where you say that there are a lot of take profit stops here, and that once these are triggered, the pair will accelerate further.

Once the stops are cleared, can we expect some rapid retracement first before the continuation of the current bullish trend, or do you think that there will be no retracement and the upwards move will continue uninterrupted?

Your thoughts are very much appreciated.

Kind regards
John

 

[Sive Morten]

Hi Sive
Firstly, many thanks for your ongoing assistance in helping me make some money on the EUR/USD pair. It is very much appreciated.

My question is about the 1.4925 area where you say that there are a lot of take profit stops here, and that once these are triggered, the pair will accelerate further.

Once the stops are cleared, can we expect some rapid retracement first before the continuation of the current bullish trend, or do you think that there will be no retracement and the upwards move will continue uninterrupted?

Your thoughts are very much appreciated.

Kind regards
John

Hi John,
wow, it's a bit far perspective. Let's return to its discussion when market will be somewhere near it.
Currently it's more important 1.45 area since there are some targets stand there and daily overbought....