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FOREX PRO Weekly, January 24-28, 2011

Discussion in 'Sive Morten- Currencies and Gold Video Analysis' started by Sive Morten, Jan 23, 2011.

  1. Sive Morten

    Sive Morten Special Consultant to the FPA

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    Today we will talk about EUR again. Even so, I still want you to show single chart of Cable, just in continuation of our previous weekly research.

    Cable Weekly
    Take a look at this chart. Here we can see clear but still potential Head & Shoulders pattern. Now we might say, that possibly construction of right shoulder comes to an end. At the end of previous week market has formed MACDP failure pattern or Stop grabber. For now it’s difficult to say will it work as it has to, or not, but this pattern itself should worry those of you, who still hold Longs. The target of this pattern is at least previous extremes in opposite direction – i.e. previous lows at 1.5336. So, be careful…
    Also remember what we’ve discussed during the whole previous week on USD/CHF… Possibly, on coming week this will start move according to our expectations.
    [​IMG]
    Ok, let’s shift to EUR…

    Monthly
    Although Trend holds bullish during three previous months, only in January price has pushed up a bit. At the same time, do you remember this huge bearish engulfing pattern that we’ve discussed previously? So, it has not been triggered yet – market has closed neither higher nor lower than the high and low of this pattern. In fact, market just stuck in the range of this huge black candle for the second month. And speaking definitely in terms of monthly time frame – some meaningful events could occur, only when market will move beyond those borders. Before that will happen only lower time frames analysis will be of high priority. Other words speaking, for the coming week we should concentrate on the swing of this black candle.
    Nevertheless, I’ve marked the nearest upside target, based on monthly chart and the nearest resistance level. 0.618 Fib expansion is at 1.4354 from marked ABC-bottom, that creates an Agreement with 5/8 Fib resistance at 1.4416
    [​IMG]

    Weekly
    This time frame contains a lot of important things. First of all, you can see the same Agreement as on a monthly chart at 1.4354-14416, but this area is above the blue line that is weekly level of overbought. So, we might say that monthly Agreement is not logical for coming week, because it beyond of level of weekly overbought (OB=1.4134 – look at the table in the left bottom corner of the chart).
    Many of you had asked me on forum, can we treat this pattern (in large circle) as DiNapoli RRT (Rail Road Tracks). Personally, I think that we don’t do this. And here is why – look, how price action has developed during this move down, particularly after hammer pattern. Market has formed a hammer, and then it started to press down to reestablish downward move. As you know – this could happen if market is taken out the low of the hammer. Then, market has not quite reach even the low of hammer, demonstrated a shallow bouncing and some people could thought that this is a hammer confirmation, and entered long with stops just below the lows of hammer pattern, that is also a 0.618 Fib support. And then market has shown strong week down and week up then – this is nothing more than Wash and Rinse of hammer’s lows. This was not a breakout. This move was just as deep as sufficient to clear up area just below the hammer’s low. And you might say, why this is not a RRT? The point is that although RRT sometimes looks similar to W&R, RRT has different nature. RRT in fact is a rejection of abnormal price level. But here we can’t call 1.29 area as abnormal, because this level was on the market just 10-15 periods ago. RRT suggests that there should not be any price action to the left, at least for 100 periods, like on weekly USD/CHF, for example. RRT can be simultaneously a W&R, because, as you understand RRT also can clear stops around previous extremes – take a look at weekly USD/CHF again…
    Now let’s get back to the point. The last thing that I want to discuss with you on weekly time frame is MACDP (red line). See, it will come in play at 1.3604 in coming week. One of the possible scenarios here is an appearing of MACDP failure pattern, so be careful. We see another one at Cable already, we have bullish context still on Swiss franc, so why it couldn’t appear on EUR? We will get it, if market in the beginning of the week will move or open above 1.3604 (in terms of EUR futures price) and week close will be lower than this level. And that could happen because the bearish pressure on intraday charts is growing, although market still can show some up move.
    Now let’s take a closer look at “BC” swing…
    [​IMG]

    Daily
    Daily trend is clearly bullish. All that we can see currently is a strong up thrust. You can see, how market has hit OB level (blue line) and not even a bounced – just creeps with it. In fact there is only one major level or resistance remains – 0.618 Fib resistance at 1.3723. It coincides with weekly pivot resistance 1 at 1.3731 and daily overbought (OB) for Monday at 1.3733. So, if market will reach this area on Monday – take chips off the table.
    Meantime, we can see another level of resistance at 1.3661. This is 1.27 Fib expansion from whole previous swing down. It could be useful to now it. 1.618 expansion is far above the market – 1.3878.
    #1
    [​IMG]

    Here is daily perspective from support point of view. First support level is 1.3474 that coincides with weekly pivot 1.3482, then we see daily Confluence support 1.3335-1.3382 that also includes weekly pivot support 1 at 1.3343, and the deepest 0.618 Fib support stands at 1.3157.
    Also take a note at the strength of thrust – price action shows good separation from 3x3 MA. This might become a foundation for DRPO or B&B directional “Sell” signals.
    #2
    [​IMG]

    4-Hour
    Here we can see nice and harmonic AB-CD pattern that is developing on the market. The target of AB-CD is 1.3690 that is very close to strong resistance area at 1.3730-1.3740. Probability suggests that market should at least bounce from this area a bit. So, this is the first area to watch for Sell signals…
    If market somehow will break it, the next area of resistance – 1.3815-1.3875 – this is 1.618 expansion from this AB-CD, 100% expansion from larger AB-CD and resistance from retracement down on daily time frame.
    #1
    [​IMG]

    On the #2 chart I want to say a couple of words about 3-Drive Sell pattern, I’ve expected to see. So, it should be done in 1.3575-1.3590 area and if it works appropriately, it should have to trigger down move from there. See, the second Drive High is at 1.27 expansion from first Drive, the 3d Drive is at conciliation of 1.27 expansion from the 2d Drive and 1.618 from the 1st Drive. But this has not happened and market continues its move up. At the same time, market is forming a bearish wedge currently, so possibly we will see some sell signals on coming week.
    #2
    [​IMG]

    Conclusion:
    In general market still can reach 1.37 area. But the bearish pressure is growing now. Personally I will be waiting for some signs of weakness in 1.3690-1.3730 area.



    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. cosmos

    cosmos Sergeant

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    Hi Sive, In the written analysis for this week, are these futures prices you are using or spot prices?
     
  3. Sive Morten

    Sive Morten Special Consultant to the FPA

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    Hi, Cosmos,
    I allways use futures price, except if I do an analysis in MT 4.
     
  4. forexboom

    forexboom Private

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    Daily close time

    Hi Sive,

    what is the GMT time you consider the close of a day, so I can synchronize my platform to display correctly the daily and 4hour chart ?

    Thank you for your excellent analysis!!!

    Maria
     
  5. Paul Onakoya

    Paul Onakoya Recruit

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    sive's timezone

    I think Sive is on GMT (UK time).
     
  6. cosmos

    cosmos Sergeant

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    Thank you.
     
  7. dkami

    dkami Sergeant

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    Hi and thanks for your update Sive great job as always:)
     
  8. Joh

    Joh Sergeant Major

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    Sive you are simply amazing- thank you heaps :D
     
  9. Sive Morten

    Sive Morten Special Consultant to the FPA

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    Futures charts that I make an analysis with, are traded on Chicago Mercantile Exchange. Just check for EUR contract specification.
     
  10. ochills

    ochills Master Sergeant

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    Sive
    To be frank.
    You are simply a professional trader.
    Patient in taking decision.
    Honestly words are not sufficient to express my appreciation to U and FPA.
    I say thanks. You are wonderful.
     

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