Sive Morten
Special Consultant to the FPA
- Messages
- 18,644
Monthly
Monthly trend holds strongly bearish. Price continues to force significant 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 we see that market has not moved much deeper during previous week, but still, one significant event has happened. Market has passed through 0.88 Fib support or recent swing up and closed again at 50% support (1.2140 area) of rally swing 2000-2007. Speaking about price action within current month – currently it looks impressive, since price has opened at the high and currently closed at the low.
Second significant moment is that market has no meaningful supports till our target - 1.16-1.17 area, and current 50% support has been tested already once and deeply pierced to 1.1875 area. Due to these reasons, may be, this level is not as strong as it was initially. So, it could be a hint on potential acceleration below 1.21 area.
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 – marked by yellow rectangle.
From long-term perspective market is entering into very, say, “dangerous” area, and it comes to it not at oversold as it was two times previously. If it will break it – this will be the road to 1.07-1.10 area or ultimately even to parity.
Weekly
Actually during previous week market just has returned back to 1.2140 support level. So, our previous analysis of weekly time frame mostly valid. Analysis of a weekly chart is a bit difficult currently, since 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.
Currently market again has approached to 1.618 extension of butterfly, 50% monthly support at 1.2140 and MPS2. Price already has shown a bounce from this area and Friday’s acceleration was solid – looks like market is seriously tuned on breakout attempt.
Weekly chart is not at oversold, MPS2 is minor level and the fact that price has passed through MPS1 tells about strong bear trend. Also price has formed two side-by-side narrow ranged weeks, first was even a small doji. Usually thrusting weeks come after narrow weeks. So, acceleration is possible. Other words, it is hard to find any bullish signs on a weekly chart.
Daily
Trend again has turned bearish, as we’ve noted during previous week, that price action in general does not support trend shifting to bullish. Since market was not able even retrace to WPR1 and to complete any Fib extension patterns on intraday charts that we’ve talked about daily updates - this looks really heavy. Also our suggestion about steepness of butterfly right wing starts to show its results on market – after retracement from 1.27 extension market has accelerated lower. We have two support levels for coming week – WPS1 at 1.2094 and stronger support at 1.20-1.2030, that includes 1.618 Butterfly point, daily oversold and WPS2=1.2029.
If you do not have still short position, recent swing down is the one that we should focus on.
1-hour
Trend is bearish as on hourly as on 4-hour chart. Here we see nice acceleration after triangle breakout. Applying classical rule of target estimation – counting triangle’s width to the downside from breakout point gives us 1.21 area – very close to WPS1. Here we will use the same tactic – potential retracement to WPP = 1.2210. It is also surround by Fib resistant levels, so it might be nice level to watch for short entry or scaling in.
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.
In short-term perspectives – suitable area to enter short 1.2210 with target around two support levels – WPS1=1.2090-1.21 and more significant support around 1.20. If this is real bearish continuation, market should not show deep upward pullback. If it will pass through WPP as knife through the butter – it will mean that something wrong.
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.
Monthly trend holds strongly bearish. Price continues to force significant 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 we see that market has not moved much deeper during previous week, but still, one significant event has happened. Market has passed through 0.88 Fib support or recent swing up and closed again at 50% support (1.2140 area) of rally swing 2000-2007. Speaking about price action within current month – currently it looks impressive, since price has opened at the high and currently closed at the low.
Second significant moment is that market has no meaningful supports till our target - 1.16-1.17 area, and current 50% support has been tested already once and deeply pierced to 1.1875 area. Due to these reasons, may be, this level is not as strong as it was initially. So, it could be a hint on potential acceleration below 1.21 area.
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 – marked by yellow rectangle.
From long-term perspective market is entering into very, say, “dangerous” area, and it comes to it not at oversold as it was two times previously. If it will break it – this will be the road to 1.07-1.10 area or ultimately even to parity.
Weekly
Actually during previous week market just has returned back to 1.2140 support level. So, our previous analysis of weekly time frame mostly valid. Analysis of a weekly chart is a bit difficult currently, since 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.
Currently market again has approached to 1.618 extension of butterfly, 50% monthly support at 1.2140 and MPS2. Price already has shown a bounce from this area and Friday’s acceleration was solid – looks like market is seriously tuned on breakout attempt.
Weekly chart is not at oversold, MPS2 is minor level and the fact that price has passed through MPS1 tells about strong bear trend. Also price has formed two side-by-side narrow ranged weeks, first was even a small doji. Usually thrusting weeks come after narrow weeks. So, acceleration is possible. Other words, it is hard to find any bullish signs on a weekly chart.
Daily
Trend again has turned bearish, as we’ve noted during previous week, that price action in general does not support trend shifting to bullish. Since market was not able even retrace to WPR1 and to complete any Fib extension patterns on intraday charts that we’ve talked about daily updates - this looks really heavy. Also our suggestion about steepness of butterfly right wing starts to show its results on market – after retracement from 1.27 extension market has accelerated lower. We have two support levels for coming week – WPS1 at 1.2094 and stronger support at 1.20-1.2030, that includes 1.618 Butterfly point, daily oversold and WPS2=1.2029.
If you do not have still short position, recent swing down is the one that we should focus on.
1-hour
Trend is bearish as on hourly as on 4-hour chart. Here we see nice acceleration after triangle breakout. Applying classical rule of target estimation – counting triangle’s width to the downside from breakout point gives us 1.21 area – very close to WPS1. Here we will use the same tactic – potential retracement to WPP = 1.2210. It is also surround by Fib resistant levels, so it might be nice level to watch for short entry or scaling in.
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.
In short-term perspectives – suitable area to enter short 1.2210 with target around two support levels – WPS1=1.2090-1.21 and more significant support around 1.20. If this is real bearish continuation, market should not show deep upward pullback. If it will pass through WPP as knife through the butter – it will mean that something wrong.
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.