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FOREX PRO Weekly July 16-20, 2012

Discussion in 'Sive Morten- Currencies, Gold, Bitcoin Daily Video' started by Sive Morten, Jul 14, 2012.

  1. Sive Morten

    Sive Morten Special Consultant to the FPA

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    Monthly
    Monthly trend holds strongly bearish. After hitting of 0.618 target from huge AB-CD pattern market has shown light but logical retracement. Now price is entering into 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.
    Although market is now also at 0.88 Fib support from most recent swing, but it has minor importance, since if market almost disrespected 0.5, 0.618 and 0.786 levels it hardly will show solid bounce due 0.88 support. Take a look at down swing – price is really heavy. During whole thrust down there was no even single bounce to major 3/8 resistance, except may be the first retracement. Price shows strong black candles that opens at the High and close and the Low.
    But what could pause bears march? One thing that I see here is 1.2140 - 50% support of whole upward swing that has started in 2000. Precisely this level has been tested in 2008 pierced to 1.1875, but held EUR from collapse. Since it has been tested already – it becomes weaker and more obvious and market, as we said, looks heavy. If we even get a bounce from here we should use it to enter short, I suppose, at least if overall picture will not change drastically.
    Our minimum target 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. Also take a look – this is significant support of 2005 as well.
    From long-term perspective market is entering into very, say, “dangerous” area. If it will break it – this will be the road to 1.07-1.10 area or ultimately even to parity.
    However particularly this issue is not very interesting for us currently. In short-term perspective we have to do two things – control remaining of bearish context and, if this will be fulfilled – catch bounces to enter short. Now we have the chance since 50% of 7-year rally should be sensible support, despite that it has been tested already once.

    [​IMG]

    Weekly
    Currently weekly time frame is most blur one. Although trend holds bearish, as well as price action, a lot of different supports slightly below market are forced us to be careful. This in turn a bit uncomfortable since currently it is impossible to predict how market will behave there and makes difficult the task of trading plan creation.
    Let’s recall our butterfly – I’ve drawn it like, although this is not perfect-looking pattern. Nevertheless, market has shown bounce from its 1.27 level in a way of bear flag and now is approaching to 1.618. This probably could be minor fact but existence of 50% monthly support at 1.2140 gives it a bit another colors. That is also 0.88 support from most recent swing up on monthly and MPS2, although I do not pay much attention to PS2 and PS3. What can we say here – will market show respect of it? Hardly somebody will answer surely.
    My thoughts are as follows. Since monthly level was pierced to 1.1875, mostly this low is treated as “low” for any orders placing. So, support around 50% itself should not be significant. Weekly chart is not at oversold, MPS2 is minor level and the fact that price has passed through MPS1 tells about strong bear trend. On previous week market has broken bear flag down and next destination that we have is 1.19-1.20 area – precisely around low of 2008. What else do we have here? Only 1.168 of Butterfly. From that standpoint I can tolerate pullback to 1.2450 area – retesting of flag pattern, but I do not want to see price returning into it.
    [​IMG]
    Daily
    Daily trend is bearish, as well as price action, but market is not at oversold. Previous week has relatively narrow trading range, that’s why pivot points for coming week stand very close to each other. Here we already see some kind of respect of support level that we’ve discussed above.
    Applying Fib work in combination of pivots gives us 1.2330-1.2367 area. Usually when market retraces in a bear trend – it retraces to WPR1. If it will be in this way – that’s OK, reasonable and logical bounce. But if market will proceed higher this will give us unwelcome thoughts, since price will approach to daily trend breakeven point and moving above WPR1 will tell that this is a bit more than retracement. So, currently let’s focus on 1.2330-1.2367.
    [​IMG]
    4-hour
    Couple of thoughts here – first, trend has turned bullish, as well as on hourly chart, and given us bullish stop grabber pattern. Second, market has broken up downward channel or wedge. So, if we will count its width to upside we will get destination point close to our level. So, from 4-hour chart perspectives of reaching 1.2330-1.2366 do not look hopeless.
    [​IMG]


    Conclusion:
    In long-term perspective nothing has changed. Nearest destination and crucial level for EUR is 1.18-1.19, while medium term target is 1.16. Breaking through it could lead to 1.10-1.12 level or even to parity in long term perspective.
    Currently market stands at monthly support (and some other lower-time frame levels) that held EUR from collapse in 2008. Although it has been pierced previously, still it is valid and price shows some signs of pullback. Personally I like 1.2330-1.2360 level as final point of current pullback, move to 1.2450 will be acceptable, but from bearish standpoint I do not want to see higher move – return back in weekly bearish flag.



    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 17, July 2012

    Good afternoon,
    sorry for delay with update, but looks like I'm in time based on current price action ;)

    So, pullback that we've expected now in progress - monthly support, even pierced once is a power. Major level to watch as potential end of retracement is the same - 1.2330-1.3265 - WPR1 and 3/8 Fib resistance.
    Also take a look that trend will hold bearish on daily time frame right till that area. Understand me correctly, I do not want to sell that market has to reverse here, but this will be nice for bears. Otherwise, trend will turn bullish and it will point on deeper retracement.

    Now, on 4-hour chart we see that trend bullish, market is forming AB=CD pattern that creates an Agreement of 1.618 extension target with 3/8 FIb resistance. Now price stands at 1.27 extension level. Our stop grabber pattern has been completed.

    Speaking about this AB=CD there are two moment to note here. First is - I do not like it very much, since AB leg is almost 2-bars swing up then fast swing down. This is not very good-looking AB-CD. But this is just that we have, so we have no choice - just stick to it.

    Second, CD leg is flatter than AB, and on 4-hour chart market is forming some kind of indecision candles - spinning tops/doji. Market is showing exhausting price action. After such doji usually strong candles appear, but in what direction?

    Despite how we like 1.2330-1.2365 level, based on its theoretical explanation, it could happen that market will not reach it. So, as usual - apply partial enter with small lot around current levels and add major part of your position around 1.2330-12365.
     

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    #2 Sive Morten, Jul 14, 2012
    Last edited: Jul 17, 2012
  3. Sive Morten

    Sive Morten Special Consultant to the FPA

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    EUR/USD Daily Update, Wed 18, July 2012

    Good morning,
    just one day has passed and EUR offers a lot of stuff to thing about. Markets are really fast in nowadays.

    So, major thing is on daily chart, since it could give us a context for a few trading sessions ahead, or may be even for a week. That is bearish stop grabber pattern. It is not confirmed yet, but if price will close below red line - we'll get it. So, this IS the pattern to keep an eye on. Another interesting moment is its target - it will be below previous lows. But market, in fact, has not any support till 1.20 so if grabber will start to work, then we will get excellent chances to see 1.20.

    Turning to intraday charts on 4-hour trend holds bullish and market has shown nice recovery after deep dive. But take a look - trend has held this move. Now we can get greater AB=CD pattern with target in the same area - 1.2330-1.2365. Recall that 1.618 target of initial AB-CD that we've discussed yesterday is also there.

    On hourly chart we will have to combine different ideas. First is based on broadenin' triangle. Market has shown deep move down twice inside of it, and both times recovered with new highs. But take a look at yellow circle - now it couldn't do this again. First hint on directon of broadenin tops/bottoms breakout is inability to continue price action inside of it.

    If we will apply fib work, then we still have chances to reach our 1.2350 area. Second top inside of trianle is 1.27 extension of first retracement, while 1.618 extension stands around 1.2330. In turn, 1.27 extension of second retracement - also stands around 1.2350. So, potentially this could be even Butterfly "Sell" here.

    As yesterday, it looks reasonable to apply partial entry, since our "prefect" level stands just 40 pips higher. I suppose you didn't regret that you've entered short yesterday around 1.23...
    So, probably we can enter short with small part - 20-25% of total position size and add more, if market will reach 1.2350 area. This area is significant resistance, and if even market will proceed higher - it should show respect of it by some pullback. Use it to protect your position.
     

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    #3 Sive Morten, Jul 14, 2012
    Last edited: Jul 18, 2012
  4. Sive Morten

    Sive Morten Special Consultant to the FPA

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    EUR/USD Daily Update, Thu 19, July 2012

    Good morning,
    yesterday market has specified points that we should keep an eye on today. On daily time frame this is the top of Stop grabber pattern around 1.2303. Market has confirmed it. Minimum target is previous swing low and failure point is the high of stop grabber bar. Price action here is forming bearish flag pattern.

    Still on 4-hour chart is a very tricky situation. Recall that yesterday we've said that market still could proceed higher and this can happen by appearing of Butterfly "Sell'. So, I hurry to tell, that it is in progress. And here we get the second point to watch - swing low of butterfly pattern. IF market will take it, then butterfly will fail. Both of these points I've marked with red circles.
    Also, on 4-hour chart we could get another bearish stop grabber. Current candle has not closed yet, so we'll see...

    On houlry chart there is nothing really interesting. We get another resistance line, so our consolidation has turned from broading to narrowing.

    What is most important for us that despite the fact how market will behave - either complete butterfly or fail it and proceed lower due daily stop grabber - context holds the same, and its bearish. Butterfly completement will just give us another opportunity to add to our positions at better price and at stronger resistance.

    So, let's monitor these points and levels for today, it really might be interesting.
     

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    #4 Sive Morten, Jul 14, 2012
    Last edited: Jul 19, 2012
  5. Sive Morten

    Sive Morten Special Consultant to the FPA

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    EUR/USD Daily Update, Fri, July 20, 2012

    Good morning,
    although theoretically market has erased our Stop grabber on daily time frame - followed price action does not change much. We have bullish trend by MACD, but price action itself does not show any support of that.
    Major picture holds the same - market inside of bearish flag. Today I've found interesting nuance in price action. Take a look that 5 days inside of flag bulls return their positions by the end of trading session - so, there were formed, let's call it hammers, side-by-side.
    What has happened yesterday? Doji. Today trading session again has started from sell-off.
    I do not know, but may be this is some sort of level indicator that shows - bears start to press on bulls. Anyway, currently context is bearish on daily time frame at my point of view.

    On 4-hour chart trend has turned bearish. Very choppy price action here. Personally I see one important thing here - market was not able to accomplish none of the patterns that we've specified - neither initial 1.618 AB-CD, larger AB-CD nor 1.27 Butterfly extension. IT has not even quite reached WPR1.

    To my mind context is the same and overall strategy is the same - prepare positions for downward continuation. Any move to 1.2330-1.2365 area could be used for short entry.

    One warning still has to be made - if market during 2-3 trading session will show flat exit from the flag and will continue coiling in the same area this could lead to fast move up.
    We will keep an eye on this moment in updates.
     

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    #5 Sive Morten, Jul 14, 2012
    Last edited: Jul 20, 2012
  6. Louis123321

    Louis123321 Corporal

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    Hi Sive, thanks for the great analysis as always, I just checked the daily video for monday though.. And it seems abit out of date? The market already went down and hit just above 1.25000... Could you please clarify this, did it hit the target and now will bounce up? I have sells at 1.22440. Could you please do an analysis and tell us where market could stop this upward move... We will need this info for monday! thanks a lot as always, i base the majority of my trades on your analysis. And in my opinion, as of 1 week ago till now and probably more so.. It is quite easy to trade right now! A perfect time to trade really, just sell at the high points 'till we reach our target. :D
     
  7. jianean

    jianean Private

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    Hi Louis,
    Cannot quite understand your message. You say market hit just above 1.25000. Do you mean 1.2250? - this is what Sive's charts show [best seen on the 4Hour chart] & what my platform shows.
    re your sells; I assume you mean you have already sold at 1.22440?
    Sorry to bother you.
    Cheers
     
  8. Irfan Shaikh

    Irfan Shaikh Recruit

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    Just a beginner

    Hi Sive

    Thanks for the always to the point analysis....

    I have learnt a lot from your analysis and the School chapters that you have prepared....For the first time I am making a suggestion here based on Loius feedback...Plz correct me if I am wrong...

    Assuming Louis means to say Market hit 1.2250 already and he has Sell order at 1.2244, I guess, the market should stop at 1.2260 and start moving down, if 1.2260 breaks, then next possible target should be 1.2287. I guess this maybe a right point for a short entry with a Stop at 1.2330 for a target of 1.2205.

    I would request a feedback on this ordinary analysis.

    Thanks

    Irfan Shaikh

     
  9. FreddyFX

    FreddyFX Sergeant

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    I think he meant 1.22500

    If he sold at 1.22440
    then I am also in on that with him and expect a huge reward, as spikes like this NEVER hold !!
     
  10. Louis123321

    Louis123321 Corporal

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    Sorry yeah I meant 1.22500! >.< my bad, and I have sells at 1.22440. I guess the next resistance is around 1.23363 area still, so if market reaches that I will be hard selling from that area too. Awaiting for your update on where upward move could stop Sive. Thanks!

    Edit: Sorry yeah I am just being retarded now, very long day at the office 7am till 7:30pm D: I was referring to the video on youtube, as it is already uploaded.. but doesn't have the recent move up included on it etc; I see now that it is updated in the pictures & text. :)
     
    #10 Louis123321, Jul 14, 2012
    Last edited: Jul 14, 2012

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