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FOREX PRO Weekly March 19 - 23, 2012

Discussion in 'Sive Morten- Currencies and Gold Video Analysis' started by Sive Morten, Mar 17, 2012.

  1. Sive Morten

    Sive Morten Special Consultant to the FPA

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    Monthly
    Price action during previous week was in the same range of monthly bar – we just see some pullback from month’s low. The major interest here, as previously, stands with price behavior around Agreement support from one side and K-resistance area from the other. After hitting of 0.618 Fib extension target and Agreement market has shown retracement to 1.3509-1.3709 that is solid K-resistance at monthly chart and typically, price should not break it after just hitting of 0.618 target. Otherwise, it will be a strong sign that market sentiment has changed and bears’ power falls under question
    Still, as we’ve mentioned previously there is a possibility of AB=CD retracement on lower time frames. In this case market could show a bit deeper move inside of K-resistance. Although this is not significant for monthly time frame, it could become very important for us, since we mostly trade at daily charts.

    Currently there are no significant changes on monthly time frame. All that we’ve said previously still in place.
    [​IMG]

    Weekly
    Weekly trend holds bullish. Our major question to weekly time frame is will AB-CD retracement happen or not. Although market has not quite reached our predefined target at 1.2950 area for 70 pips, still it has shown nice move down due bearish engulfing pattern and has allowed us to trade on short side almost whole week. But now this context is mostly exhausted and if market will proceed move lower – this will probably happen by some other reason.
    In fact, we can see that market has reached only 50% support and not quite reached 0.618 level. Based on technical picture AB-CD retracement looks probable. If it will happen, then we have two potential targets. First one comes at retesting of K-resistance 1.3509-1.3627 level. This target is 0.618 extension at 1.3530 level and creates an Agreement with K-area. Also pay attention that this target stands higher than tops of bearish engulfing, so if market will start move up – this high will not hold. Don’t place stops just above it! By the way, here monthly pivot resistance 1 stands also – 1.3548.
    Next and major target of this potential retracement also creates an Agreement with weekly Fib resistance level at 1.3814-1.3858.
    As we’ve estimated potential targets – how we will possess ourselves on them? Unfortunately we can’t answer on this question just using of weekly time frame – we need lower ones. Here we just can say that since bearish engulfing context exhausted, trend still holds bullish and market has found some support precisely at levels from which most AB-CD patterns starts – we have bullish context for daily time frame.
    [​IMG]

    Daily
    Trend holds bearish, market is not at oversold. Unfortunately, even daily chart does not totally clarify overall picture. Here is why… This is in fact, the same situation as on monthly chart, but in lower scale. We see stepped move down by the market and hitting significant support area, that includes 0.618 AB-CD extension target, monthly and weekly pivot supports and 50% Fib support. On Friday market has shown retracement. Although it looks solid on hourly and 4-hour time frames, but on daily chart this is just 0.382 retracement from downward swing that is also K-resistance area 1.3181-1.3187. Is it normal 0.382 retracement after hitting 0f 0.618 target? Absolutely. Does this retracement eliminate continuation to AB=CD target at 1.29? Definitely not. So, what we have to do then?
    Answer is the same as on monthly chart. Initially we have to keep an eye on price action around K-area. While reaching of 0.382 retracement is typical after hitting of just 0.618 target, breaking K-area is untypical. That will be the first clue. If market will break this area and continue move up – this will be the first sign of possible AB-CD retracement on weekly. If market will show solid thrust down from here, as it was a bit earlier then reaching of 1.29 is still possible.
    Secondly, if market will break K-area to upside, it will be safer to wait trend shifting on bullish side. This will be just safer. When and if it will happen, our context will be completed and we can calmly search the possibility for enter long.
    So, our week will probably start just with monitoring of price action around 1.3190 level.
    [​IMG]

    4-hour
    May be you will find something else interesting here, because current situation on intraday charts shows a lot of different patterns and opportunities for trading. On 4-hour chart we see situation that we’ve discussed on Friday – possible breakout of 1.3119 level. Here we can say even more – there was nice thrusting move up and acceleration right to 1.0 extension target of AB=CD. Theoretically market should show some pullback (usually to 0.618 support) and then continue move to 1.618 extension at 1.3240 level.
    [​IMG]

    1-hour
    Due to solid upward move on Friday – on hourly chart we see nice possibility for reverse H&S pattern (that is what probably our forum member, Venelin, talking about). The point is that Head stands right at 1.618 extension of left shoulder, and 1.618 ratio is very typical for H&S patterns. Second – harmony of the head is nice. Third moment, potential retracement to 0.618 support is in a row with 4-hour AB=CD pattern. That is what I particularly will be watch in the beginning of the week. The one moment still that has to be noted here is that H&S patterns fails oftener than works on intraday charts. How to trade it? Here is a lot of ways. If you’re scalper, you may trade this reversal pattern. If you’re day trader – watch, will market fail to proceed lower to enter short, or if daily trend will shift bullish – enter long with weekly AB=CD.
    [​IMG]



    Conclusion:
    Long-term bias holds bearish, but weekly time frame does not exclude some upward continuation in the way of AB=CD retracement. So, for positional traders will be safer to enter short, when and if weekly trend will turn bearish. Long-term target still stands at 1.16-1.1650 area
    On short-term perspective we still need some more clarification from the market. Breakout of daily K-area could become one of them. Although market now is forming clear reversal pattern on intraday charts, these patterns very often fail. So, the major level to watch in the beginning of the week is 1.3070. If market will fail to complete H&S pattern on hourly chart, then reaching of daily AB=CD target at 1.29 becomes real.
    If market will complete it and turn daily trend to bullish above K-resistance level on daily, then it could become the first sign of starting AB=CD move on weekly chart.


    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 20, March 2012

    Good morning,
    I do not know how about you, but current situation on market leads me to conclusion that better decision probably is to wait a bit. Here is why:

    On daily TF yesterday we have a stop grabber right at WPR1, 4-hour 1.618 extension target and just below major 5/8 resistance. Also, we've discussed potential H&S pattern on daily TF, that currently looks quite realistic. That is what about bearish moments.
    Speaking about bullish ones, we remember that weekly trend is bullish. So, if market will move and hold above daily 5/8 resistance it will accoplish at once 3 moments - confirm daily bullish trend, move above WPR1 and erase H&S. That's why I prefer to wait.

    Speaking about intraday charts, on 4 hour trend is bullish, market has achieved 1.618 target right at WPR1, so some retracement could come.

    On hourly TF you see Fib Tree (as Michael calls this indicator). There are 2 significant levels here. First is K-support. The first level to keep a close eye on. The point is that market is not at overbought at daily. If it has significant bullish power - it will probably find support there and proceed higher. Besides, all previous retracements were 50% as maximum.
    Second, is Major 0.618 support of this thrust. Moving below it will skew probability in favor of daily SG pattern and this will be first bell of potential deeper move down.
     

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    #2 Sive Morten, Mar 17, 2012
    Last edited: Mar 20, 2012
  3. Sive Morten

    Sive Morten Special Consultant to the FPA

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    EUR/USD Daily Update, Wed 21, March 2012

    Good morning,
    On daily time frame I see new significant event - trend has shifted to bullish side and erase potential Stop Grabber pattern. So, now we are gradually drifting to the weekly upward AB=CD. We have AB initial swing, then BC retracement, that gives us Gartley "222" Buy" right to 50% of AB leg. Now market has confirmed this support and shifted trend. From this perspective we need to wait retracement of current part of CD leg to enter long. Trend will hold bullish even market will show 5/8 retracement to 1.3110 level.
    But this topic is a bit early. Our today's task is to find out - why this retracement could happen.

    First, because market stands slightly below 5/8 daily resistance at 1.31 level. That's also very close to monthly PP and weekly PR1 (although market has moved above it already).

    on 4 hour chart trend holds bullish and we see almost the same Fib tree.

    Our major focus today with hourly chart. Here we have potential Butterfly "sell" with either 1.3290 1.27 reversal point or 1.3320 1.618. 0.618 daily resistance stands accurately between them.
    This butterfly is valuable for 2 reasons. First is, because you can trade it purely, if you're scalper on short side of the market. Second, is because it could approximately show us depth of retracement. I prefer to see that market will find support around 1.3150-1.3170 area - between major 50% and 3/8 support.
    So, if you're day trader - keep an eye on reversal and then on retracement.
     

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    #3 Sive Morten, Mar 17, 2012
    Last edited: Mar 21, 2012
  4. Sive Morten

    Sive Morten Special Consultant to the FPA

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    EUR/USD Daily Update, Thu 22, March 2012

    Hello everybody,
    Today market gives us a lot of scenarios as short-term as medium term. On daily TF it is not much to comment - market is still flirting with major 5/8 resistance and pivot levels. We can see high wave pattern, telling us that market still indecision.

    So, here we have two contradictive possibilities - H&S pattern and potential bullish weekly AB=CD. So, if you have a bearish view - this is the time to trade in a row with H&S. If market will break 1.33 to upside, this will shift probability in favor of AB=CD and that will be the conservative tactic to trade it.

    But I probably will try agressive way. We need hourly chart for that purpose.
    Currently market is struggling with 1.3244 Fib resistance level and recent upward move on hourly chart looks like retracement - this is not thrusting upward continuation. It means that this could lead to hourly H&S with minimum target at Agreement around 1.3140. If you're scalper - you may try to trade it as well. (Pay attention to W&R on 5-min chart)

    So, agressive tactic assumes long entry around 1.3140 Agreement and move stop to b/e asap. Because if this move will be due daily H&S I do not want to be on bullish side.
    This approach appears from the thought that now we have a continuation and starting of weekly CD leg. But since previous BC move was solid, market probably will not be able to start upward move without retracements. That's why i expect this move and Agreement is very suitable area to try long entry.

    So, choice is up to you, today you may trade daily H&S, hourly bearish AB=CD or to wait for 1.3140.
     

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    #4 Sive Morten, Mar 17, 2012
    Last edited: Mar 22, 2012
  5. Sive Morten

    Sive Morten Special Consultant to the FPA

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    EUR/USD Daily Video, Fri 23, March 2012

    Good morning,
    Although yesterday's trading plan has been accomplished almost at 100% - market has reached as our Agreement level around 1.3140 as is showing pullback now from it, I have to warn you about illusion of bullish continuation.
    In fact, I do not like how market has reached this level - by just single jump. This tells us, that downward continuation is probable today to 1.27 Fib extension Agreement around 1.3110-1.3115 at minimum, or even to 1.618 target around 1.3080.

    Take a look at retracement lines on 4-hour chart. In fact, this is cloned lines and you may see that they are very harmonic in term of depth, length and angle. 4 hour trend still holds bearish.

    On hourly chart we see that based on this harmonic retracement market stands at hourly K-resistance, so if you're scalper this is a chance try to enter short. Although this will be risky, but risk/reward ratio is excellent. Also take a look at nature of this move - this is not thrusting action and looks more like retracement.
    If you have long position according our yesterday outlook - protect it somehow just to not turn profit into loss.

    Speaking about a bit farer perspectives, If market will not start thrusting move up from 1.3080 area, then probably we will see H&S pattern fully function on daily time frame.
     

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    #5 Sive Morten, Mar 17, 2012
    Last edited: Mar 23, 2012
  6. rashidin5178

    rashidin5178 Sergeant

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    Hi Sive,
    Thanks a lot for your brilliant analysis as always.
    Could we consider DRPO Sell on H1 if next price will close below 3x3 currently? But the problem is previous up candle quite strong. The target maybe somewhere around 1.3070 area too.
    Have a nice weekend, Sir.
    Thanks and Best Regards.
     
  7. stelore

    stelore Sergeant

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    Thanks 1000 for your job Sive.

    Bye from Italy
    Stefano
     
  8. ochills

    ochills Master Sergeant

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    Thanks Sive as usual .
    will u be posting any information about shares & bond
    investment valuation and fundametal analysis.
     
  9. ochills

    ochills Master Sergeant

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    Goos Work as usual Sive
    Pls do u intend to share this information on shares & bond investment valuation and fundametal analysis.
    I love shares and I intend to reinforce my understanding.
     
  10. Sive Morten

    Sive Morten Special Consultant to the FPA

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    Rashidin,
    I'm not sure that we have sufficient thrust.

    Hi Ochills,
    Well, hardly it will happen here, since FPA is dedicated purely to Forex markets.
     

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