FOREX PRO WEEKLY, January 15 - 19, 2017

[Sive Morten]

Good morning,

Today, guys we finally will take a look at EUR. On GBP we haven't got DRPO confirmation signal, as no 2nd close below 3x3 DMA was. It means that DRPO setup is cancelled. May be GBP will show retracement, but definitely it will be triggered by some other pattern.

On EUR picture has become more interesting. As we've said yesterday - EUR retracement is based on butterfly "Sell" pattern and on Overbougt as on daily as on weekly chart. As a result, yesterday we've got pretty nice Evening star pattern and reversal candle right on top. Combination of these factors here makes us think that retracement should reach at least 1.2070-1.2090 daily K-resistance.

On 4-hour chart we have DRPO "Sell" that has minimum target right around WPP @1.2110. But it doesn't mean that market can't go slightly lower:

Mostly because DRPO itself takes the shape of H&S pattern on hourly chart. Since we see clear downside acceleration on CD leg of AB-CD pattern, chances that XOP target will be met are not bad. And it stands right around daily K-support - 1.2080 area:

So, agreement among different levels and extensions on different time frames looks interesting.

 

[gwynfor]

Thank you again Commander. Your willingness to give detailed answers is a great blessing to your weak recruits !!!

 

[Lolly Tripathy]

Still, I expect Crude Oil @77$. This should support CAD. May be we will get something of this kind




Thank you so much sive sir
Ur analysis is my strength as always
And you are my Fx Super Hero
I literally follow every line what you wrote..
God bless & thanks once again

 

[FreddyFX]

Lolly, I agree with you 100%.
Master Sive is a gift from heaven !!!
I hope the EURUSD will keep following his advices, lol.

 

[Sive Morten]

Morning guys,

today we will proceed with our EUR scenario. Now there are two major events on market that are discussed most of all. First is possible US government shut down, if spending will not be approved in Senate. Although as debt ceil as government spending discuss every year, but every time this makes investors to be nervous a bit.

Second - meaningful diversification of US dollar assets as by Central Banks as by Wealth Funds, mostly in favor of Chinese yuan. So, it was mentioned even by IMF. China and Japan also have contracted US Treasuries purchasing. This another factor that may be doesn't stand among major ones, but still it could make some effect in future.

Speaking on technical situation - we're still watching for retracement, at least until our "Evening star" will stand valid. In general we do not care much about this retracement, because we do not trade it. Our major task here is try to use it for better long entry. Today we see deep pullback inside "Evening star" body on daily chart:

If our suggestion will be correct and candlestick pattern will work - then we should get a kind of AB-CD action down, somewhere to 1.21 area of daily K-support and WPP:

On hourly chart the shape of H&S pattern has been erased and now price action mostly reminds flag. But our AB-CD pattern is still valid and its XOP as well.

Here guys, another reason, why I do not want trade this retracement short. On DXY - market has not completed major target. It means that foundation of this retracement is rather fragile:

Still, if you're searching chances for scalp short - pay attention to 4-hour chart as price stands very close to MACDP line. Appearing of bearish grabber could give you some confidence. Probably it will be accompanied by puny butterfly on hourly chart - take a look at charts above...

For others - it is better to use this retracement not for trading short, but for better chance to take long position, as soon as any clear bullish continuation patterns will be formed here.