1. This site uses cookies. By continuing to use this site, you are agreeing to our use of cookies. Learn More.

FOREX PRO Weekly December 19-23, 2011

Discussion in 'Sive Morten- Currencies and Gold Video Analysis' started by Sive Morten, Dec 17, 2011.

  1. Sive Morten

    Sive Morten Special Consultant to the FPA

    Joined:
    Aug 28, 2009
    Messages:
    12,305
    Likes Received:
    17,067
    Monthly
    December month gradually comes to an end, and currently we see solid bearish price action by this month. Monthly trend holds bearish, market is not at oversold. So, long-term bearish bias still holds intact. Meantime, the most important information for us on monthly time frame is Agreement support level of 1.2905-1.3040. Since market has reached it – this is not the time currently think about increasing short position on lower time frames. Although we all know that anything could happen, market could just absolutely disrespect this level by some emergency event from EU, but we have to act according to current situation. Now, what we do see is that market at monthly Agreement. Probability suggests that commonly it leads to some retracement – either deep or small.

    Another important moment is that weekly/daily AB=CD target that we are trading currently stands slightly lower that Agreement level. It could happen so, that retracement will start when market will pierce a bit monthly Agreement just to reach weekly AB=CD, because 100 pips move on monthly is a very small difference – it could be even seen on the chart.
    [​IMG]

    Weekly
    On the weekly time frame we see downward breakout of pennant that we’ve talked about previously. Trend holds bearish, level of oversold for coming week is 1.2576, so there are no barriers from here. This time frame does not carry any additional information – you can just better see AB=CD pattern and its target. By the way, take a note that target stands slightly lower than previous significant low, so market could proceed slightly lower, fueled by stop triggering. In this case it can trigger 1.618 extension of different AB-CD at 1.2750 as well.
    Here again I have to warn you that market in nearest days will have to struggle against monthly support. It might look as deeper retracements, pullbacks more choppiness on intraday charts and so on. So, if you’re long-term trader and want to increase position – it’s better to wait when this pullback will start or when there will be some clear signs that it will not happen at all. Otherwise, you may get to very desirable entry and even less desirable pullback after that. But still - the decision is yours.
    [​IMG]

    Daily
    Here we see some retracement that we’ve discussed through the week due 1.618 Butterfly pattern. Overall picture looks solid bearish, market is not at oversold. Recent price action could help us to find crucial points – they will let to estimate will retracement be deeper or not, does market reestablish move to 1.2830 level or not yet and so on. Pivot points will become our major helpers here.
    First of all, take a look that CD leg of our large AB=CD pattern develops in some kind of parallel channel. Lower border for coming week coincides with target of AB=CD and pivot support 1 1.2855 (lime dash line), while upper border stands between pivot and nearest Fib resistance 1.3146 and daily K-resistance 1.3264-1.3269. Pay attention that nearest Fib resistance stands at the same level as previous lows – 1.3142. Since pivot points traded by market in 70% of cases – it is very probable that market can touch pivot and reverse to the downside. This will be perfect for the bears. Still, crucial level for short-term is 1.3264-1.3269, because you can see that MACD trend will hold bearish only till that area. Also this is upper border of parallel channel and pivot resistance 1. And as we’ve said million of times – when market stands in bear trend and turns to retracement – it should retrace not higher than pivot resistance 1. So, if market will break this level – it will mean that deeper retracement is possible.

    Also it could lead to failure breakout of the channel, since daily K-area and pivot resistance stand just above it. Overall probability still stands on the side of downward continuation, because market stands very close to AB=CD target and in most cases it reaches it.
    That’s being said, there are two levels that we should carefully monitor on coming week. First one is 1.3142 – if there will be sell signals, probably market will touch pivot and continue move down. Second one is K-resistance 1.3264-1.3269 + pivot resistance 1.3296. This could be also a failure breakout of channel.
    Nearest target is 1.2830-1.2855 AB=CD + pivot support 1, or even 1.2750 if stop orders will add sufficient fuel for downward acceleration.
    [​IMG]

    4-hour&hourly
    I do not post 4-hour chart, since there is nothing new to comment. Most important is that trend is bullish. On hourly chart below it is difficult to mark anything clear – very choppy price action inside some channel. Probably you can find a lot different butterflies and AB-CD’s inside it, but since we do not have any clear patterns – they will not help us much. Still, one interesting thing is that most peaks are stopped near hourly overbought, while market does not touch oversold at all. May be this is the sign that upward pressure is a bit greater than downward and market still will creep a bit higher. Second, in such choppy and sloppy environment very often becomes useful an applying of harmonic swings. Take a look – upward move repeats at 100 pips. Hence, next possible reversal target is 1.3106 approximately. While downswings (have not marked) also very harmonic are around 80 pips. If this consequence will be broken – this will be an early warning of possible thrusting move.
    But again – just look at the chart and try to offer something really clear – this is a real task.
    [​IMG]

    Conclusion:
    Long-term bias holds bearish. It makes sense to hold long-term bearish positions. Still do not be to hurry to add more. Probability suggests that some retracement could happen. Probably it will be better to add more when it will happen.
    In the beginning of the week, we have to keep en eye on two levels, since they could become ones from which downward move could reestablish – 1.3142 and 1.3260-1.3290. Potential targets are 1.2830 or even 1.2750. After that retracement for long-term players could start.
    Intraday chart is very difficult to analyze so applying of harmonic swings looks reasonable. Once this consequence will be broken – this could become an early sign of thrusting move and end point of current retracement.


    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. asif faryad

    asif faryad Sergeant

    Joined:
    Aug 7, 2010
    Messages:
    194
    Likes Received:
    0
    Thank you beautiful summary Sive.

    I am on holiday next week so i take this opportunity to thank you for teaching me and others how to trade.
    I thank Felix for providing this service to us.
    Wish you Felix and all the regular traders Damien Triantus Rashdin and Yousaf whose posts i enjoy a lot a very good Christmas and Prosperous New year trading.

    Asif :))
     
  3. CheeLee

    CheeLee Private

    Joined:
    Oct 28, 2010
    Messages:
    14
    Likes Received:
    0
    Hi Sive,

    Thank you very much for your analysis and guide.
    Wishing you happy and healthy always...
    Merry Christmas and Happy New Year! :)

    Cheers,
    Chee Lee
     
  4. maarnio

    maarnio 9pmest.com Representative

    Joined:
    Apr 2, 2010
    Messages:
    110
    Likes Received:
    0
    What might happen when Euro hits 1.27-1.28

    <a href="http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2011/12/18_Jim_Rickards_-_This_Will_Send_the_Price_of_Gold_to_the_Moon.html"target_blank">Jim Rickards</A>
     
  5. Sive Morten

    Sive Morten Special Consultant to the FPA

    Joined:
    Aug 28, 2009
    Messages:
    12,305
    Likes Received:
    17,067
    Logically, some pullback should come. If nothing outrageous will happen at that moment in EU of cause.
     
  6. maarnio

    maarnio 9pmest.com Representative

    Joined:
    Apr 2, 2010
    Messages:
    110
    Likes Received:
    0
    Hi Sive,

    Did you read the Jim Rickhards link?
     
  7. Sive Morten

    Sive Morten Special Consultant to the FPA

    Joined:
    Aug 28, 2009
    Messages:
    12,305
    Likes Received:
    17,067
    I did. In general, It looks correct - I mean overall assessing of current situation, can't say something definite about 1.30 and currency wars.
     
  8. Sive Morten

    Sive Morten Special Consultant to the FPA

    Joined:
    Aug 28, 2009
    Messages:
    12,305
    Likes Received:
    17,067
    EUR/USD Daily Update, Tue 20, December 2011

    Good morning,
    there is not much to comment, especially on daily time frame, but still:

    Trend holds bearish. While market has almost hit oversold, now it turns to flat consolidation, that possibly could be treated as bearish flag. If we will try to estimate classic target of this, as its mast - it will be around 1.27-1.2750 - very close to weekly 1.618 extension taht we've discussed in weekly research.
    In general, bearish bias holds well, no signs of its possible break yet.

    On 4-hour chart trend is bullish. Here could be a couple of patterns. First one is AB=CD with target around weekly pivot and upper border of the flag - that will give us larger "222" "Sell".
    Another possibility is Butterfly Sell - it could start right now, or market could show some move up to 1.3077 target and then start move down. 1.618 target stands at 1.2884 - very close to weekly AB=CD at 1.2830 and 1.2848 - daily 1.618 AB=CD extension. Also we see some shallow stop grabbers on 4-hour chart - may be they will trigger some upward move. If market will turn 4-hour trend bearish at take out 1.2990 level -then probably downward move reestablishes.
    It is a bit early for Christmas Eve silence, but looks like this is it.
     

    Attached Files:

  9. Sive Morten

    Sive Morten Special Consultant to the FPA

    Joined:
    Aug 28, 2009
    Messages:
    12,305
    Likes Received:
    17,067
    Thanks, guys. I also wish you and your dear ones happy holidays, peacefull and prosperous life.
    BTW, I extract Christmas thread of previous year and stick it in the root - if you want you may use it for wishes...
     
  10. Joh

    Joh Sergeant Major

    Joined:
    Oct 11, 2007
    Messages:
    957
    Likes Received:
    214
    Hi Sive, thank you ever so much for your generous teachings day in day out - it is appreciated and
    your tenacity is amazing.
    May you and your loved ones have a wonderful Christmas and may 2012 be a year full of good health
    lots of laughter -abundance and heaps of prosperity. :) Joh
     

Share This Page