Sive Morten
Special Consultant to the FPA
- Messages
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EUR/USD Daily Update, Tue 26, July 2011
Good morning,
The first part of our trading plan for the beginning of the week has been completed - market has shown acceleration to the upside and hit daily AB-CD.
Although in weekly research I've pointed that reaching of 1.27 extension on 4-hour chart will be sufficient, market has reached 1.618 and that is important as you see a bit later.
Today daily time frame is not very important for us. Here we just see that just above the market weekly pivot resistance 1 and daily overbought.
Our task for today is watch on 4-hour and hourly charts for clear "sell" patterns - will they appear or not.
We have some reasons for that:
1. Market has hit daily AB-CD target and CD leg is flatter than AB;
2.Market has accomplished Butterfly "sell" at hourly chart;
3. Although this is not so significant, but on 4-hour chart we see bearish divergence with MACD.
One of the potential patterns could be H&S, since Head is very typically stands at 1.618 from the shoulder and the half of this pattern has been formed already.
Still be careful, because fundamental data and major news could drastically skew market's parity and technical analysis.
So, we have at least three way to trade current situation:
1. If you trade harmonic patterns - you may trade butterfly "Sell"
2. If you trade trend - wait, when hourly trend will shift bearish and market will show some acceleration to 1.43 area then you may try to use some retracement back to enter;
3. If you trade classical patterns - wait, may be H&S will appear.
Also probably there could be some candlestick patterns right on top. So there are a lot of ways to trade current market.
One thing, that we have to be aware of is acceleration above 1.4515-1.4520. This will erase Butterfly and potential H&S patterns. In this case, probably, we will not see any retracement down. But currently it's very difficult to predict something, it's a bit too early talk.
Today we should focus on possible reversal patterns or their failing.
Good morning,
The first part of our trading plan for the beginning of the week has been completed - market has shown acceleration to the upside and hit daily AB-CD.
Although in weekly research I've pointed that reaching of 1.27 extension on 4-hour chart will be sufficient, market has reached 1.618 and that is important as you see a bit later.
Today daily time frame is not very important for us. Here we just see that just above the market weekly pivot resistance 1 and daily overbought.
Our task for today is watch on 4-hour and hourly charts for clear "sell" patterns - will they appear or not.
We have some reasons for that:
1. Market has hit daily AB-CD target and CD leg is flatter than AB;
2.Market has accomplished Butterfly "sell" at hourly chart;
3. Although this is not so significant, but on 4-hour chart we see bearish divergence with MACD.
One of the potential patterns could be H&S, since Head is very typically stands at 1.618 from the shoulder and the half of this pattern has been formed already.
Still be careful, because fundamental data and major news could drastically skew market's parity and technical analysis.
So, we have at least three way to trade current situation:
1. If you trade harmonic patterns - you may trade butterfly "Sell"
2. If you trade trend - wait, when hourly trend will shift bearish and market will show some acceleration to 1.43 area then you may try to use some retracement back to enter;
3. If you trade classical patterns - wait, may be H&S will appear.
Also probably there could be some candlestick patterns right on top. So there are a lot of ways to trade current market.
One thing, that we have to be aware of is acceleration above 1.4515-1.4520. This will erase Butterfly and potential H&S patterns. In this case, probably, we will not see any retracement down. But currently it's very difficult to predict something, it's a bit too early talk.
Today we should focus on possible reversal patterns or their failing.