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FOREX PRO Weekly August 27-31, 2012

Discussion in 'Sive Morten- Currencies and Gold Video Analysis' started by Sive Morten, Aug 25, 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.
    Currently August continues to be an inside month to July, but now we see starting upward pullbackThis is not a surprise, if we recall what the level it is. This is 50% support of major EUR rally of all times 2000-2008 year. Although this level was penetrated previously in 2010, but looks like it is still valid. This is most powerful Fib support inside of 1.18-1.23 area.
    Still, long-term bearish context still holds and 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. Take a look – this is significant support of 2005 as well – marked by yellow rectangle.
    By current bounce market has reached nearest Fib resistance at 1.2590 area. Current bearish context can hold move even to monthly K-resistance at 1.2950-1.3150 area.
    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.
    So, major conclusion for us here is that market bounces from strong support and if it will pass though 1.26 – next area of monthly resistance is 1.30-1.31


    [​IMG]

    Weekly
    Now I’m looking at weekly chart and still can’t find any lead that could give us understadning how far current move up could be. Trend holds bullish here and market not at overbought. Blue line is a cloned previous retracement up and market currently has covered its distance already.
    There are two things to discuss. From one point of you, that seems to me more important we have weekly butterfly “Buy” and bullish divergence right at major 50% monthly support. Such cobination assumes significant bounce per se.
    From another point of you market does not show blistering upward action, butterfly’s minimum target, as 3/8 retracement has bit achieved... We know that usually if price is held by pivot resistance 1 – then it is probably just a retracement. So, market now is approaching to resistance – MPR1=1.2640, previous low resistance and Fib resistance around 1.2590-1.26. May be market will reach this area, but major question is – will it pass it?
    [​IMG]

    May be it will seem a bit curious for you, but I offer you to look at gold chart. You will better understand my confusion. First of all – gold never reverses smooth. This commodity likes to twist and turn and churn traders. On weekly chart we see clear support level with a lot of stops below it and Fib extension target that stands slightly below this level – perfect situation to see simulteniously completement of AB=CD and W&R, that could let you calmly open long position. In long-term perspectives I have bullish view on gold. It is seasonally bullish now (till early spring of 2013), pattern itself is bullish and fundamentally, with a lot of QE’s programms with negative interest rates support gold.
    By this reasons I have some doubts about current breakout. That might become our life-jacket. If gold will return back inside of this triangle – it will lead to reversal on EUR/USD as well. And even more – it will probably lead to move to 1500 area. Hence, EUR USD will probably continue move down in term of monthly time frame.
    But, if gold will hold – it could lead to Butterfly “Sell” appearing (try to find it without my assistance) and move to 2000 area. EUR in this case should show upward continuation. Unfortunately, it is difficult to say how long we will have to wait to get this clue.
    [​IMG]

    Daily
    So, since we’ve got at least some prompt in medium-term perspective, let’s start with short-term trading plan.
    On daily time-frame trend is bullish, but market stands at overbought at Fib support 1.2590 – that gives us directional “Stretch” bearish pattern. Here is also butterfly reversal point and some other targets that we’ve discussed during previous week. Now we have also bearish engulfing pattern here. So, for bears, who want to trade the Stretch pattern trading plan looks simple – place stop above engulfing pattern.
    Potential target of Stretch probably will be some strong support level that bulls should keep an eye on. Personally I like major 3/8 Confluence support + WPS1 1.2380-1.2383 and 1.2342 area. If market will break it down probability of upward continuation will decrease. Moving below WPS1 will be the sign that move down is not just retracement, and, this also could shift trend to bearish.
    So, if you’re bullish – wait when market will show pullback and reach some of supports. First worthy area is 1.2340-1.2380
    [​IMG]

    4-hour
    So, we’ve got some move down from resistance that we’ve specified. Actually on 4-hour chart I would like to tell about just two moments – trend has turned bearish, and, if market will hold the harmony of retracement, it should reach precisely an area of daily 1.2380 support. That also will be trend line support.


    [​IMG]

    60-min
    Hourly chart shows that this also an Agreement with current AB=CD 1.618 target point. At the same time, 1.0 target coinsides with WPP=1.2465 and nearest Fib support as well (take a look at daily chart). So, 1.2450 will be significant support as well. Still, since market at overbought – this will add more weight to downward move and I suppose that there is not bad chances to see 1.2380...

    [​IMG]




    Conclusion:
    Long-term bearish sentiment is still in play. Pullback that now in progress on monthly chart should not surprise us, if we take into consideration the level importance where this bounce has started. From long-term perspective, even move to 1.30 will not erase bearish context.
    To not miss solution on weekly chart – keep an eye on gold market. If Gold will fail with current triangle breakout – EUR rally will over and we will see new leg down with creation of new lows probably.
    In short-term perspective your action will depend on your view on market. Bears could try to trade Stretch pattern, while bulls should wait a pullback to enter long, since market at overbought and resistance.




    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 28, August 2012

    Good morning,
    market has reached our first destination - 1.2460 support area - 3/8 support of Butterfly swing+ WPP. So, our minimum target has completed as well as our long-term trading context - reversal around 1.2550 and retracement.

    Still, some moments tells that we could see downward continuation to 1.24-1.2380 area. There are two of them. First is daily overbought - market has started move down right from there. And usually overbought gives some more pace to the downside. Second - harmonic swings on 4-hour chart. They suggest move right to 1.2380.

    At the same time current price action can't be treated as reversal - that is retracement. Price action is very gradual and choppy. This is not typical for reversal and downward acceleration.

    On hourly chart you can see short-term reversal pattern right at current support - butterfly Buy and some AB=CD patterns. This could trigger some pullback to the upside.

    So, if you have entered short, as we've suggested by daily engulfing - it's not bad idea to take half profit and move stop to b/e. Since this is just a retracement - it could finish at any moment. Be ready, keep a close eye on downward price action.

    1.2380-1.24 area will be an area to watch for buy signals, since this is daily K-support+WPS1 and trend line support. Also this is trend breakeven point. So, if there will not be any turmoil - market should respect this area by some upward bounce, at least at first touch.

    And don't forget to keep an eye on gold, as we've discussed on weekly thread. This could become a clue for mid-term perspective.
     

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    #2 Sive Morten, Aug 25, 2012
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  3. Sive Morten

    Sive Morten Special Consultant to the FPA

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    EUR/USD Daily Update, Wed 29, August 2012

    Good morning,
    recent market recovery right from our nearest target level one more time has confirmed neccessity partial profit taking and protecting rest of position by b/e stop. Right as we've specified in Forex Military School.

    Although theoretically some chances on donward AB=CD pattern still exist, but I'm not very fascinating on them, since such solid bounce is not common for retracement developing. By this move market has broken harmony in retracements on 4-hour chart, turned 4-hour chart bullish and confirmed bullish sentiment on daily, since market now stands above WPP.

    Next target is 1.2640-1.2650 area that includes WPR1 and MPR1.

    On 4-hour chart we could get another butterfly "Sell", that will have 1.618 target around 1.2660. On hourly chart ultimate target of our yesterday Butterfly stands around 1.2620.

    So, today I do not see any bearish leads - no patterns, Directionals or something like that to trade. Since trend is bullish and market stands above WPP and not at overbought - one direction that we could apply today is up.
    Probably, if market indeed will form Butterfly on 4-hour chart - it will be possible to enter long on retracement from yesterdays upward bounce with target around WPR1 and MPR1.
     

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  4. Sive Morten

    Sive Morten Special Consultant to the FPA

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    EUR/USD Daily Update, Thu 30, August 2012

    Good morning,
    actually today is not much to add. On daily market stands in some sort of bullish flag. In general situation looks pretty bullish - price above WPP and does not show any deep retracement, bullish consolidation and trend is also bullish.

    On 4-hour chart we could clearly see butterfly pattern that we've suggested yesterday. Price has shown 50% retracement that is very typical for butterlfy patterns.

    Hourly chart shows AB=CD pattern. Trend has turned bullish here.
    Interesting that all targets lead to aproximately the same area - 1.2640-1.2660 - MPR1+WPR1. This is the target for the rest of current week, I suppose.

    Our crucial point is a low at WPP. Normal price action in current environment does not suggest its break if bulls are still control the market.
     

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  5. Sive Morten

    Sive Morten Special Consultant to the FPA

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    EUR/USD Daily Update, Fri 31, August 2012

    Good morning,

    Yesterday's price action gives a lot of questions concerning future of bullish bias on daily time frame. Once we've said, that since market has not shown AB=CD retracement and made fast bounce from WPP, normal price action suggests upward continuation but not an erasing of this bounce. But particularly erasing we're seeing now.

    Formally trend holds bullish, market still stands inside bullish flag, butterfly has not being erased yet on 4-hour chart and so on. But price action... It left small chances for upward continuation, especially if we will take into consideration NASDAQ confirmed daily DRPO "Sell" and Gold nature.

    On hourly chart we also see downward triangle breakout that absolutely unnatural in current situation from bullish point of view.

    So, my thoughts - it's better to stay flat. Enter short a bit early, since we could get daily Stop grabber, for example, or, say, butterfly will work.
    At the same time I'm not very fascinating about Long position, when market couldn't confirm its consistency to continue upward move.
     

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  6. ochills

    ochills Master Sergeant

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    Thanks Sive as usual.
     
  7. Lolly Tripathy

    Lolly Tripathy Master Sergeant

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    Thank you sive sir for the selfless help..
    God bless you &
    Have a fantastic weekend with ur family.. :)
     
  8. georgeta

    georgeta Sergeant

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    Hello Mr. Morten!
    Gold seems very appealing to many investors now. Of course many of them will lose money. There is no such thing that easy money on the market.
    I am also very interested to invest big chunk of my savings in gold. The problem is I lack the knowledge. So, your hint about solid gold against Eur from a few days ago is invaluable. Still, can you tell how can I buy solid gold against Eur? Is that an instrument? And how can I sell the investment next year?
    A million thanks (1K more precise)! :)
     
  9. Sive Morten

    Sive Morten Special Consultant to the FPA

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    Hi Georgeta,
    if you want to invest in physical gold, then better to invest in some ETF. That is leverage free investment. More risky with leverage - you can buy mini-gold futures.
    Or, you may buy coins or bullion with your bank and keep them in personal safe or something like that.
     
  10. Tony Cappas

    Tony Cappas Recruit

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    Many thnaks once again
    Tony
     

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