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FOREX PRO Weekly July 25-29, 2011

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

  1. Sive Morten

    Sive Morten Special Consultant to the FPA

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    Monthly
    Monthly trend is bullish and as we’ve said in previous research recent price action is not match to market that turns in reversal. It’s more common for continuation market. Price has hit monthly overbought, 0.88 Fib resistance, and after all it just has reached nearest Fib support at 1.4140. Second, although it seems was broken, market still has not reached Confluence support and now it looks more like W&R of previous lows. This is not very typical for situations when market really intends to move lower. It looks like the downward power is not so great, at least currently. Also take a look at price action during the recent couple of months – two hammers. Sellers try to press down, but buyers return all right back, hence EUR purchases even from nearest retracement levels are significant. So, overall small signs, if we will take them together, tell that up move continuation is very probable. Furthermore, recent price action looks like bullish pennant pattern, so I suggest that it looks like bullish wedge on weekly time frame, we’ll see…
    Nearest target stands at 1.5081 – just above the previous highs – this is 0.618 extension from most recent AB-CD pattern. Next area to watch is 1.5272, but potentially it could turn to butterfly “Sell” pattern. The target of this pattern is 1.27 extension at 1.6027. Also it almost coincides with 1.27 target of bullish AB-CD at 1.5925 and with 1.0 Fib extension of most recent smaller AB-CD. By the way, from classical standpoint upward move should be equal to the mast of the pennant – that is 1.5866 area.

    Still, from another point of view, if you draw trend line and link lows at 1.1874 and 1.2870, then you will be able to see that this trend line nicely holds upward move. From that perspective retracement in July to 1.37 Confluence support will be normal, since it precisely will reach this trend line.
    The crucial area for bullish perspectives is 1.3650 – down break of pennant and Confluence support will tell us that probably we can’t count on upward move in nearest time.
    [​IMG]
    Although we’ve spoken also about 3-Drive “Sell” pattern in previous researches, here I do not mention it, since I hope that you remember it. Besides, it has almost the same potential reversal point as AB-CD pattern – 1.5250 area.

    Weekly
    Weekly trend holds bearish. First, I just want to remind you our suspicions, that we’ve discussed in previous research. If we will take a look at overall picture then we’ll see that the nature of up move and current move is different. Current action is not thrust. It looks like retracement, and probably upward move could continue. Who knows, may be current pullback is just a respect of strong support, but market has not quite reach it (monthly Confluence support). That’s why it’s hardly so. I don’t know but currently personally for me this environment looks more bullish rather than bearish. Here are some reasons for that. First, we clear see bullish dynamic pressure here. Look, market holds bear trend, but price action does not support that, market does not accelerate lower. Second, from classical perspectives, we see that bullish wedge is forming. Third, inside the wedge Butterfly “Buy” pattern has been formed (we discussed it previously) and now market acts as it has to – shows nice upward week after pattern has been completed. Also we can treat this recent price action as Gartley “222” “Buy”.
    Speaking about the targets – nearest one is 1.27 of Butterfly at 1. 4934, slightly about the highs. But this is the same as 1.5081 – 0.618 Fib extension from AB-CD pattern, because 1.50 is significant level, and there are a lot of stops, just above the high at 1.4925. Since target of butterfly is higher – stops will be triggered and market will easily fly to 1.50-1.51 on execution of these stops.
    Second area of targets is 1.5250-1.5270. It includes 1.618 Butterfly extension target and monthly AB-CD target. Still, currently fundamental events and data come on first stage and could change overall picture drastically, but currently it looks like as we’ve just said.
    [​IMG]

    Daily
    In previous research we’ve said, that market has shifted momentum to bullish, and that was really so. Recent price action shows real strength to the upside. Strong white candles to the upside that are combine with small black ones to the downside. Such moving is very often calls as “two steps forward, one step back”. During this move market accelerates right to 1.0 Fib extension, without any respect of 0.618 target. Very often this leads to upward continuation – sometimes to 1.618, sometimes to 1.272.
    Although upward momentum is strong, market has hit monthly pivot and 0.786 Fib resistance and taken some pause. Two equal tops of side-by side trading session tells, that there some sellers appear in that area. Since this stop, market now stands not at oversold and theoretically could continue move up, but 1.4440 area is 1.0 Fib extension target, so very often market shows some retracement down when it hits it.

    So, it’s very probable that market will turn to some retracement, after it will hit 1.4433 target. Hence, we need to discuss potential support levels, where we can enter long. Retracement should not be very deep, so, looks like just couple of levels are worthy to observation. First one is 1.4250 area, that includes nearest Fib support, previous highs at 1.4256 and weekly pivot at 1.4249. If market will hold above it, it will give us more confidence with bullish character of the market.
    Second area is Confluence support at 1.4151-1.4184. Lower you also can see pivot support 1 at 1.4083 and 1.4041 – 0.618 Fib support.
    I prefer to see retracement only till 1.4250, because it agrees with butterfly move and overall bullish picture. If market will move below pivot, then we will need additional analysis and keep an eye on further development.
    [​IMG]

    4-hour
    This chart adds some details to daily one. First, we see that there is also a Confluence support around 1.4250. Second, market has not hit daily AB-CD target and has shown shallow retracement to nearest Fib support that is also a 50% support of strong upside bar. I dare to assume that here we could see some reversal pattern with upward target – H&S or Butterfly “Sell”, may be 3-Drive, because 1.27 extension of current retracement stands at 1.4445 – right above target of AB-CD. Market should hit it before deeper retracement will start. Also here we can see bullish stop grabber on 4-hour chart although it looks not very attractive. Still, we have to be aware of last move up with reaching of daily AB-CD target.
    [​IMG]

    1-hour
    Still, if market will not show last upward jump and turns directly to retracement, potential AB-CD pattern creates double Agreement. First one is with 1.4250 area and second one with 1.4150-14180 Confluence support. So, lower area should hold, otherwise, it will be hard to speak about further bullish perspectives. Anyway, if you want to short this market right from current levels – place stop above daily AB-CD target, or don’t be surprised by stop out if upward jump suddenly will take place.
    [​IMG]

    Conclusion:
    Position traders:
    It’s better to wait till 2d of August before open long-term positions, but currently to my mind market has more bullish signs than bearish.

    Intraday and daily traders:
    Market probably will show some retracement. It’s preferable if it will stop at 1.4250. If you want to short this market be aware of jump up to daily AB-CD target in the beginning of the week.


    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. LeFrog

    LeFrog Private

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    Many thanks for your weekly market overviews and daily videos. Great consistent teaching. Your explanations of previous days and weeks of market action is an invaluable wealth of information. My only hope is that I learn from your teaching well enough before you move on. That will be a sad day indeed. Until then I will look forward to your daily videos with great anticipation. Kind thoughts
     
  3. ertore

    ertore Private

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    Thanks a lot Sive for this great analysis. It coincide with mine. I already have pending buying order at 1.4280 spot quotes cause I don't want to missed the move. Weekly Timeframe support the upside and as we are not overbought shallow retracement I expect. Thanks all you do and hope that you form your dinapoli chat room

    Regard

    Fxdominicano
     
  4. CheeLee

    CheeLee Private

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    Hi Sive,

    Thank you very much for your analysis.

    Cheers,
    Chee Lee
     
  5. onewithzachy

    onewithzachy Private, 1st Class

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    Thank you coffee

    Dear Mr. Morten,

    Thanks you a trillion that every week you make a neat forecast presentation for us for free.

    :) May we buy you a cup of coffee ? :)

    All the best.
     
  6. rashidin5178

    rashidin5178 Sergeant

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    Gartley Sell on H4

    Hi Sive,

    Just to highlight gartley sell appear on H4. What is your opinion Sir? Can you advice us what are the possibilities we have from the perspective of price behaviour? Based on current market behaviour, do you think this pattern will fail?

    Thanks and Best Regards.
     

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  7. Sive Morten

    Sive Morten Special Consultant to the FPA

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    Hi, Rashidin,
    I'm a bit surprised by your question, since all my reseach is dedicated to this pattern ;)
     
  8. rashidin5178

    rashidin5178 Sergeant

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    Sure Sir. Definitely I have no doubt about your research. I just wondering about the deeper retracement because this pattern almost perfect and it happened on H4 timeframe. For a newbie like me, thinking about the almost perfect and the powerful of harmonic pattern, it give some curiosity about future development of the market. I'm asking just to have some more clarification on your research.:confused:

    Now I become more clearer about your research.

    Anyway, sorry for my poor question and thanks a lot for your answer, Sir.

    Thanks and Best Regards.
     
  9. Sive Morten

    Sive Morten Special Consultant to the FPA

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    Well, may be I just miss something in your question. May be you want to ask something additionally to those information that is in research? Sorry, if this is really so. I just have written all details that I see with this pattern. It's difficult to add something.
    Also I point potential depth of retracement - that is what you want to know, as I understand.
     
  10. onewithzachy

    onewithzachy Private, 1st Class

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    Gartley vs Butterfly

    Dear mr. Morten,

    rashidin5178,s Q made me thinking. As far as I know, in Gartley CD is shorter than XA while in Butterfly CD is longer than XA.

    So, beside counting it's fibs, how do we know a Gartley is valid and not gonna be a Butterfly ?.

    Thanks is in the mail :)
     

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