Forex FOREX PRO WEEKLY, January 27 - 31, 2020

[Sive Morten]

Morning guys,

While EUR is "waiting" when DXY will reach the same 5/8 Agreement level, we could take a look at GBP. Situation here is very interesting, as tomorrow BoE meets and there should be rate decision. Taking "2+2" we suggest that BoE will keep rates intact, which, in turn, should lead our daily setup to target point, showing upside action. Technically, we have here triangle shape and hidden MACD bullish divergence:

On 4H chart, our '222" Sell is done perfect, showing much greater drop than we thought initially. But now, take a look - we have "Morning star" pattern. Invalidation point of bullish setup is "C" point on 4H chart.

On 1H chart market also has completed AB=CD pattern, forming steep "222" Buy and now price action is taking the shape of H&S pattern. Thus, we could use it to make attempt for long entry. We suggest that on inspiration of 31st of January of EU leaving, and tendency is recent sentiment on BoE decision, which has changed from 75/25 to 50/50 of rate cut, BoE will try to use this positive sentiment and keep rate untouched, trying to safe this ability for the future.
We, in turn, will try to use it, as this decision should push GBP higher:

 

[sveckar22]

Thanks for sharing your set up, I managed to open a short yesterday on USD/CAD at 13190. What take profit target are you looking at considering the upcoming FED data? Thanks.

So yesterday we saw a nice move to the downside but we didn’t get engulfing on the daily chart. So this is what I am looking at today. With black, I marked the a and b points we already have. On this retracement today market already passed 0.382 FIB retracement, so now I will be looking for a reaction at 0.618 FIB. The pattern suggests a minimal target of this setup being 0.382 FIB from the larger AB=CD pattern which would coincide with the XOP if this will indeed will be the c point marked with red, which would also be in confluence with 0.618 FIB of the last move up.

I hope I explained myself clear enough. The markings in red are just assumptions of what could happen, of course, today is FED day so anything could happen. I will first watch for a reaction at 0.618 but will keep my SL unchanged.

Also on the hourly chart, we don’t have some symmetrical AB=CD pattern to one of the FIBs but the market is now accelerating through XOP to 0.618 FIB.

 

[soul rebel]

So yesterday we saw a nice move to the downside but we didn’t get engulfing on the daily chart. So this is what I am looking at today. With black, I marked the a and b points we already have. On this retracement today market already passed 0.382 FIB retracement, so now I will be looking for a reaction at 0.618 FIB. The pattern suggests a minimal target of this setup being 0.382 FIB from the larger AB=CD pattern which would coincide with the XOP if this will indeed will be the c point marked with red, which would also be in confluence with 0.618 FIB of the last move up.

I hope I explained myself clear enough. The markings in red are just assumptions of what could happen, of course, today is FED day so anything could happen. I will first watch for a reaction at 0.618 but will keep my SL unchanged.

View attachment 50449

Also on the hourly chart, we don’t have some symmetrical AB=CD pattern to one of the FIBs but the market is now accelerating through XOP to 0.618 FIB.

View attachment 50450

Thank you kindly for that, it was very clearly explained

 

[sveckar22]

Looking at this acceleration towards 0.618FIB and close above it on 4H makes me reconsider the possible outcomes on this trade. Maybe this Three Drive to the top could form, which coincides with ABC XOP from 7th January 2020 and minor OP target. The first two drives are very symmetrical. I will wait for this 4H close or maybe I will be stopped out before.

Watching the price action above 0.618FIB.

 

[Sive Morten]

Morning guys,

In addition to our GBP setup - let's see what we could do today on EUR. But first 2 cents to GBP - now rate change odds stands 45/55 in favor of keeping rate unchanged. Within just few hours before BoE probability has changed. So it seems that we're correct in our expectations and will keep watching what will happen today.

On EUR - market "is waiting" when DXY runs up with it and also hit the same AB=CD target around major 5/8 Fib level. In fact, DXY has to make the last effort to do it. As EUR stands flat it means that buyers step in gradually and support EUR, expecting reaction on strong support area. So do we either.

On 4H chart you can see choppy action and bullish trend at daily Agreement support area. OP target has been met last week, while DXY is still coming to it:

On 1H chart we see widening wedge pattern, that indicates growing strength of buyers as upside pullbacks become stronger. Here is also we have a divergence...
Still, as DXY has to make another upside swing to complete OP, EUR could show minor downside action inside the wedge, somewhere to 1.0995 area, which also could be treated like right arm of H&S. Anyway, upside reversal around 1.0995 will mean that upside breakout is coming, because it will be "early" reversal inside the wedge, as EUR will not touch lower border.

That's being said - we're watching for two moments. Major one is DXY OP completion, once it will happen - keep an eye on EUR, it should be around 1.0995. Upward turn around will be the sign of coming upside breakout and starting of upside reaction on daily Agreement support area.

 

[Sive Morten]

Morning guys,

Today we again take a look at GBP, as on EUR is nothing interesting by far - some reaction has started but it is too lazy. Meantime, our entry setup on GBP is done properly and now we could consider few targets.

On daily chart - picture barely has changed. On Monday it will be new part of UK history as they leave EU, at least on paper. Yes, it is transition period, but, formally, divorce is completed. Patriotic inspiration and speculators' activity could shake boat more, so it is really the riddle, where market will open on Monday...
So, I'm not even dare to suggest whether our adjusted C point will be reached here or not:

Let's specify also closer stand targets. First, is we have COP - it is around 1.3188 and it is more realistic to reach. Next target is OP, which actually our C* point is. Also it agrees with butterfly extension. When we know potential targets - you have to decide what to do with position as we are entering the weekend. First is that we have to do anyway - move stops to breakeven or even at some profit. Second - this is personal, think about closing of some part of existing position 30-50% by the end of the day.

 

[soul rebel]

Looking at this acceleration towards 0.618FIB and close above it on 4H makes me reconsider the possible outcomes on this trade. Maybe this Three Drive to the top could form, which coincides with ABC XOP from 7th January 2020 and minor OP target. The first two drives are very symmetrical. I will wait for this 4H close or maybe I will be stopped out before.

View attachment 50451

Watching the price action above 0.618FIB.

View attachment 50452

Thanks for posting the update. I was stopped out at 13220 with my original entry and am looking to the GDP release today, perhaps there is context to go short around 13252 area (as defined in your posting at 3 drive target)?

 

[sveckar22]

Thanks for posting the update. I was stopped out at 13220 with my original entry and am looking to the GDP release today, perhaps there is context to go short around 13252 area (as defined in your posting at 3 drive target)?

I was also stopped out of this trade with around 40 pips SL.

This is what I am looking at right now. The market will probably complete this OP and XOP target, maybe on some spikes during the GDP release, if we get a reaction from there the three drive will not be as symmetrical but still could work. Maybe I will take a Short position from there.

Also on USOIL we have a completion of this AB=CD pattern, and market showed some reaction to it yesterday.

I am still not sure if I am gonna trade USDCAD today, maybe I will wait to see how new CFTC positions stand over the weekend