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FOREX PRO Weekly June 06 -10, 2011

Discussion in 'Sive Morten- Currencies and Gold Video Analysis' started by Sive Morten, Jun 5, 2011.

  1. Sive Morten

    Sive Morten Special Consultant to the FPA

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    Monthly
    EUR/USD comes in very crucial period of time and this is partially confirmed by technical analysis. Ahead of us should be decided such questions as QE II finish, Greece bailout and US debt ceiling. Any of these events could drastically affect future behavior of EUR/USD pair. One of our long-term scenarios is a move to 1.60 area. This could happen, for instance, due US technical default and rating downgrading to AA. I’m telling all this stuff just to tune you on expectation of unexpected and be prepared to any scenario that just a couple of month ago have seemed as impossible. Don’t be deceived by summer period, when markets usually turn to calm and soft action.

    Monthly analysis has not changed much, since this is rather long-term period. I just want to appoint the major current task for us. We should estimate will we see deeper AB-CD retracement to 1.37 level or market will continue move higher. Today I’ve thought what pair to choose, because there is also very interesting situation on Kiwi dollar. I will continue to keep an eye on kiwi and may be we will discuss it in nearest time or in daily video.
    During the past two months market has shown retracement till nearest 3/8 Fib support at 1.4140 that stands very close to previous highs at 1.4276. Now it shows some bouncing from there. But this could be just respect of this level after initial touch or may be this is a real continuation to upside. Unfortunately we can’t estimate it from monthly chart.
    Although we’ve counted to see bearish engulfing pattern, but its final view looks as insufficient. To confirm bearish bias we need close below 1.40. Downward possibility also implicitly confirms with market overbought. Usual retracement target during overbought is zero point of Detrended Oscillator and this level stands around monthly Confluence support. Also its worth to note here that trend will remain bullish, even if market will reach 1.37 area. Still, if market will hold on first Fib support, this will be much better for current bullish bias and Butterfly pattern.
    Nearest target stands at 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 recent bullish AB-CD at 1.5925.
    Also take a note that overbought level for June stands at 1.5162 – right at previous highs 1.5144. Market should close above highs at 1.4925 to give us some confidence on bullish move continuation.
    [​IMG]

    Weekly
    Since momentum trade, aka B&B has finished on weekly time frame - there are no significant signals right now here. We can discuss it only in general. Let’s take a look at two different possibilities that could come in nearest time.
    First one is on Chart #1. Trend is bearish now, but price action shows nice upward move. Generally speaking, market shows solid bullish bias, because it has retraced only till nearest Confluence support around 1.40 and hasn’t moved below of previous highs (yellow rectangle). This looks bullish. So, first scenario assumes continuation of upward move and nearest target stands at 1.52-1.5250 area. This is monthly and weekly overbought and three different targets – monthly 1.0 Fib extension at 1.5272, weekly 0.618 1.5233 and 1.618 from previous retracement down 1.5145. Also don’t forget, that this level is a previous highs on monthly 1.5144.
    #1
    [​IMG]

    Second scenario is on chart #2. Current move up could turn to AB-CD retracement right to weekly/monthly Confluence support and Agreement 1.3650-1.3750. Weekly oversold also stands very close to that area. Still monthly trend will remain bullish even till that area.
    #2
    [​IMG]

    Hence, our major task in near term is to find some signs that could give us a clue which scenario will prevail.

    Daily
    Daily trend is strongly bullish. Market has not just reached our weekly target at 1.4560, but even disrespect 5/8 Fib resistance, showing us strong bullish bias. Just above the market stands 0.786 Fib resistance at 1.4719 and 0.88 level at 1.4810. The level of overbought for Monday stands at 1.4682. But currently speaking about upside target has not much sense, because market has closed above daily overbought and other levels even higher. Our primary task for the beginning of the week is to wait for retracement and estimate possible levels to watch for.
    [​IMG]

    4-hour
    Trend is obviously bullish. During the previous week market has not even touched weekly pivot point. It seems that we should watch for two major levels. First one is pivot + Confluence support at 1.4493-1.4522, second – pivot support 1 + Confluence support 1.4382-1.4402. In other circumstances our major level would be around pivot, but since market at daily overbought, we have to be aware of deeper retracement. Besides, when market retraces in bull trend, it usually retraces to pivot support 1 – 1.4370 area. So, as one of possible scenario, we could see reaching 1.45 – pullback, and then move to 1.4370.
    [​IMG]

    Conclusion:
    Position traders:
    Major task here is to estimate – will market show AB-CD retracement or not. Currently market shows real bull strength and odds are not great that it could happen. From the other point of view – it’s not too much time has passed yet. Anything could happen, especially due fundamental events at the end of the month.

    Intraday and daily traders:
    Currently is not the time to establish Long positions, since market at daily overbought. We should wait for pullback. And here there are two levels to watch for:
    1. 1.4490-1.4520
    2. 1.4370-1.44
    Although market has strong upside momentum, but reaching of the second area is possible, due to overbought.
    Unfortunately market has not even started any pullback and closed at highs on Friday, hence we have no tools yet to estimate levels with more precision.



    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. nicolebobbin

    nicolebobbin Private

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    Beautiful analysis !
     
  3. tun13

    tun13 Corporal

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    Thank Sive,for your analysis it's such a blessing,the BB weekly buy was a good trade for me,Thanks alot!
     
  4. ALF

    ALF Private, 1st Class

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    KIWI dollar

    ....."Today I’ve thought what pair to choose, because there is also very interesting situation on Kiwi dollar. I will continue to keep an eye on kiwi and may be we will discuss it in nearest time or in daily video."....

    Hi Sive,

    Please let us know your view on the current upside move of the KIWI dollar.

    Thanks.
     
  5. georgeta

    georgeta Sergeant

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    eurgbp

    Hi everybody!
    Something interesting on EURGBP H4. Looks like a DRPO but I cannot see any resistance on Daily. Maybe it will go to 78.6 but market started retracement after Daily overboght, so I do not know.
    Good luck!
     

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  6. Sive Morten

    Sive Morten Special Consultant to the FPA

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    EUR/USD Daily Update, Tue 07, June 2011

    Good morning,
    looks like market has turned to some relief price action showing calm and gradual retracement.
    Our major expectation is linked to 1.45-1.4520 area - support around pivot point. Although daily and hourly trends are bullish, market has hit daily overbought couple days ago, and probably we can count on deeper retracement.

    As you can see on hourly chart, market has accomplished AB-CD pattern to 1.4560 and now finished smaller upside AB-CD. Both of them could be greater AB-CD (or "222") with target around 1.4512-1.4530, depending from which Fib resistance down move will start. For me this development looks logical and probable.
    Second possibility is Butterfly Sell. Left wing has accomplished. If market will not take out 1.4555 and then move above C-point - then, probably we can see it.

    But still, current environment is not impressive - no interesting signals and patterns. So, keep an eye on 1.4510-1.4520 for potential Buy, or at development of Butterfly "Sell"
     

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  7. nicolebobbin

    nicolebobbin Private

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    are you talking about this butter fly "Sell" signal, is it a good decision to short sell here and put TP at 1.4520 ? It looks like a sure win signal
     

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  8. Sive Morten

    Sive Morten Special Consultant to the FPA

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    Hi Nicole,
    In general yes, although I've talked about a bit different shape, but idea is the same.
    On your chart "222" pattern or Bat is shown. Butterfly target stands beyond (i.e. higher) than initial swing down.
     
  9. rashidin5178

    rashidin5178 Sergeant

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    H1 Butterfly Sell

    Hi Sive,

    I'm very appreciate if you can explain more detail on the right wing of the H1 Butterfly sell that you mentioned in your analysis today.:confused:

    Thanks and Best Regards.
     
  10. nicolebobbin

    nicolebobbin Private

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    Hi Sive, market still hasn't shown any retracement yet, do you think it could touch 1.4520 - 1.44 area for me to enter buy ?
     

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