Forex FOREX PRO WEEKLY, March 23 - 27, 2020

Sive Morten

Special Consultant to the FPA
Messages
13,404
Morning guys,

Let's take a look at EUR again. So Fed has breathed some life in market, promising to keep them on liquidity needle. We see rebound across the board, especially on Gold. This is very important because as we said in weekly report - gold should strop dropping when run into USD will be close to an end. Swap spreads also calm down a bit and now investors probably will start to turn around and see where to spend this "new cash". Process is not over yet, but, it seems, it is close to the final point.

On EUR we also see the pullback. Now price stands at first 3/8 Fib resistance area, but we mostly watch for 1.0950-1.10 K-resistance by two reasons. First is - this is good area to go short, whatever target will be - either short-term or longer term. Second - this area is an indicator. Upside breakout could mean reversal, at least on daily chart:
eur_d_24_03_20.png


On 1H chart we see that market has to apply big efforts to move higher. Our suggestion on Double Bottom is not realized, because take a look - upside action is too slow and gradual. But it is going, so let's see what we will get. Anyway our major setup stands the same - we're waiting for daily K-resistance area.
eur_1h_24_03_20.png
 

Sive Morten

Special Consultant to the FPA
Messages
13,404
Morning everybody,

Despite outstanding support from the Fed, counter reaction on FX markets develops slowly. Downside momentum and rest of demand for USD are still high, so it is more time needed to markets to normalize situation.

Thus, on EUR we still watch for 1.10 major resistance. On GBP situation is very similar but have few additional moments. First of all, technically - upside bounce comes from monthly 1.27 butterfly and oversold levels. In common conditions this combination suggests at least 30% bounce, that means 1.25-1.27 weekly K-resistance level. But this is the story of a longer-term perspective.

In shorter-term we keep an eye on downside thrust and potential B&B "Sell" setup that could start around 1.21 area. Today we could get 1st close above 3x3 DMA.
gbp_d_25_03_20.png


On 4H chart we have AB-CD pattern, with OP around 1.20 and XOP slightly higher. As retracement looks really heavy and slow - it seems that more chances for B&B to start is around 1.21...
gbp_4h_25_03_20.png


Simultaneously we have the risk factor. As market doesn't show upside continuation yet - we could get bearish dynamic pressure setup that makes possible appearing of downside butterfly and creation of a new low. To destroy this setup market needs to climb above the "B" point on chart above.
gbp_4h1_25_03_20.png


Anyway, currently we do not see attractive setups for long positions as price stands too close to resistance. Thus, only B&B "Sell" stands on the table by far.
 

Venelin

Master Sergeant
Messages
401
Morning everybody,

Despite outstanding support from the Fed, counter reaction on FX markets develops slowly. Downside momentum and rest of demand for USD are still high, so it is more time needed to markets to normalize situation.

Thus, on EUR we still watch for 1.10 major resistance. On GBP situation is very similar but have few additional moments. First of all, technically - upside bounce comes from monthly 1.27 butterfly and oversold levels. In common conditions this combination suggests at least 30% bounce, that means 1.25-1.27 weekly K-resistance level. But this is the story of a longer-term perspective.

In shorter-term we keep an eye on downside thrust and potential B&B "Sell" setup that could start around 1.21 area. Today we could get 1st close above 3x3 DMA.
View attachment 52130

On 4H chart we have AB-CD pattern, with OP around 1.20 and XOP slightly higher. As retracement looks really heavy and slow - it seems that more chances for B&B to start is around 1.21...
View attachment 52131

Simultaneously we have the risk factor. As market doesn't show upside continuation yet - we could get bearish dynamic pressure setup that makes possible appearing of downside butterfly and creation of a new low. To destroy this setup market needs to climb above the "B" point on chart above.
View attachment 52132

Anyway, currently we do not see attractive setups for long positions as price stands too close to resistance. Thus, only B&B "Sell" stands on the table by far.
To be on the "safe" side , I`d be waiting for reaction (if any) arround 1.23 - 50% level for BnB sell, as that level is strong confluence( target of nicely looking 8h. DRPO buy and potential Weekly strech).
Wait and see mode :)
2020-03-25 10-55-58.jpg
 
Last edited:

Sive Morten

Special Consultant to the FPA
Messages
13,404
Morning guys,
As GBP as EUR are coming to the point where our B&B "Sell" setup should start. Today let's keep up with EUR. On daily chart price breaks through first 3/8 level and is coming to our major point - daily 1.10 K-area and Overbought. This is the level where we expect downside action starting:
eur_d_26_03_20.png

On 4H chart B&B could take the shape of classic '222" Sell pattern, as AB=CD target stands precisely at K-resistance and creates Agreement with it:
eur_4h_26_03_20.png


On 1H chart, in turn, AB-CD could be finalized by 1.618 butterfly "Sell" pattern. Thus, if you consider participation in this mess - it would be better to make entry based on Butterfly, as it stands slightly below K-area, while stop should be placed above daily K-area. As usual - minimal B&B target is 5/8 downside retracement. Potentially it could trigger downside continuation as well, we do not know it by far...
eur_1h_26_03_20.png
 

Sive Morten

Special Consultant to the FPA
Messages
13,404
Morning guys,

Non-market driving factors skew application of technical analysis. Common tools that we usually apply work with some delay due larger volatility, emotions and over-extension - first to the downside running for USD, now in opposite direction.

Thus, on EUR the level that in other circumstances would become 100% starting point of B&B now was ignored and EUR has moved to major 50% resistance. All this stuff happens on a background of overbought!.
But, at the same time - price keeps possible B&B setup as we have have 3rd close above 3x3 DMA and price at major resistance level. The same story with our B&B setup on GBP.
eur_d_27_03_20.png


On 4H chart market slightly exceeds AB=CD target. But, to not been caught in a trap, we should avoid blind entry and wait for some minor bearish reversal pattern, because as AB=CD as our butterfly were ignored.
eur_4h_27_03_20.png


Thus, to avoid pitfalls, we could consider minor H&S pattern that is forming on the top on the 1H chart. It should let us to place very tight stop, just above the head. But what is more important - if EUR will not turn down out there, B&B probably fails. This is pain or gain situation.
eur_1h_27_03_20.png
 
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