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FOREX PRO Weekly May 14-18, 2012

Discussion in 'Sive Morten- Currencies and Gold Video Analysis' started by Sive Morten, May 12, 2012.

  1. Sive Morten

    Sive Morten Special Consultant to the FPA

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    Monthly
    In fact, I’ve drawn most interesting thing on chart by lime line – will price turn to AB=CD upward retracement and test again K-resistance or not. Now it looks a bit scaring by black May candle, still chances exist…
    Since market has shown downward week, our primary attention gradually shifts to weekly time frame, particularly to its trend – will market be able to hold bullish trend on weekly or not. If trend will break it probably will lead to downward continuation on monthly chart and retracement will be over. All other thoughts are still the same:
    Trend holds bearish. Almost 4th month in a row market stands in consolidation after hitting of Agreement around 1.2950-1.30 area. Since Agreement is stronger area than just simple Fib level we have suggested that market could show some deeper retracement up and retest 1.37-1.38 level. Current price action on weekly chart shows that this indeed could happen. In general, we can say, that market is locked between Agreement support and Confluence resistance area.
    Recall that our long term expectation is dollar appreciation to 1.16 level and move to 1.37 will be treated just as retracement in a bearish monthly trend. Overall price action looks so, that does not care any hidden hazard for bearish sentiment. Price stands in a tight range after significant thrust down. This is very common and nice situation for bears.
    From bearish perspective 1.37 K-level has extreme importance as holding barrier. We can accept reaching of 1.37 from long-term bearish view, but we anyhow can’t justify move through it. If it will really happen, I mean breakout through 1.37, then it will put under question overall bearish view on long-term charts.

    [​IMG]

    Weekly
    So, we see strong bearish picture on weekly – trend has turned bearish, market accelerated through MPS1 with gap opened, triangle was broken to the downside. Despite the fact how bearish current picture is – what chances still bulls have? I see only one way how bulls could drastically change overall picture. Recall that on previous week we’ve said: “If market will show some jump from 1.29 then it could lead to appearing of bullish stop grabber and we can hope on upward move”. So, this opportunity has not been vanished totally yet. Although stop grabber is mostly single bar pattern, but sometimes it forms as two bars pattern. It looks like trend shifting at the first bar and fast reestablishing of previous trend on second. So, if this will be really the case we s will be able to count on AB=CD move still either to 1.3435 (0.618 extension target) or even 1.37 (1.0 extension target).
    Hence, coming week will become determinative one. Market will have to show 150 pips jump up for reestablishing bullish trend on weekly chart. This is absolutely reachable and not much distance for weekly time frame. If this will not happen, then we will have to prepare to possess ourselves for long-term downward trading in a row with monthly time frame.
    Still, since upward move opportunity has some chances and 150 pips is significant move, we should react on this possibility somehow and we have to prepare trading plan for this case too.

    [​IMG]
    Daily
    Well, market has reached destination that we’ve specified on previous week – 1.29 area. Although it has done it not by Butterfly pattern (that was preferable for us), still we’re here, what’s next? Currently I can say nothing except to wait one more week and watch close to the same level. Current price action on daily and intraday charts (as well as fundamentals) makes me doubt bullish perspectives, but yet chances still exist we have to take them into consideration. Here we do not see anything new. All that I can do on daily is just to show pivot points and resistance levels. Take a note that WPR1 stands at 1.3019, while we need close above 1.3050 to shift weekly trend to bullish again. Here is how different technical tools confirm each other – moving above WPR1 after solid bear trend indicates potential reversal. That is what we need by the end of coming week. Conversely we will have to search short entry point.
    Second note – if jump up will happen – do not upset if you will miss initial move. After such solid downward move market probably will give us deep retracement, where we can enter. May be this is even most preferable way to act and much safer. Apply enter on retracement and buy deep instead of catching falling knife. In current environment it seems reasonable.
    [​IMG]
    4-hour
    Market slowly but steadily moves lower. As we’ve said previously market gravitates to nearly standing daily targets – one has been hit already and another one stands in 1.2890 area. Here picture is clearly bearish and gives confidence that market will hit 1.618 butterfly’s point with solid probability:
    - Excellent example of bearish dynamic pressure. Trend holds bullish but price action is not and does not support it;
    - Small retracement after 1.27 extension and no reversal. There is just single area left – 1.618 extension;
    - Recall that we’ve said about DRPO LAL in updates. Here we have DRPO LAL failure.
    [​IMG]

    Hourly
    This picture I leave intact – levels still valid, since market shows very slow move down.
    [​IMG]



    Conclusion:
    Long-term traders come in final period of their expectation. If weekly trend will not turn back to bullish on coming week, then they can use first rally on weekly to enter short in continuation of monthly move. If opposite will happen, then they will have to wait a bit more and probably get better entry level around either 1.3450 or 1.37.

    On short-term perspective we come to the point – either rally to 1.3050 by the end of the week or we will start to search opportunity to sell then.
    4-hour chart shows high probability of reaching 1.2890 area. By this move market will reach all targets standing around. So, here we can act twofold:
    1. If you want to take more risk, you may try to enter long around 4-hour Butterfly 1.618 completion point. That will be some sort of falling knife catching. Still this tactic is not miserably hopeless. Place stop not farer than 40 pips from entry point. Monitor your position and move stop to breakeven as soon as possible.
    2. Safer way to enter and I like this way more – is to wait real thrusting action from 1.29 area. If no thrusting action will come – you will have no loss. Disadvantage of this strategy is that you will have to sit on your hands one more 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. Sive Morten

    Sive Morten Special Consultant to the FPA

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    EUR/USD Daily Update, Tue 15, May 2012

    Good morning,
    I suppose, that by yesterday's price action market has given us a hint on its intention. But not only breakout of 1.29 level tells about it. Take a look at Monthly Pivots. Market has reached MPS2. Usually when market shows retracement in some trend MPS1 or MPR1 hold it. So, following by that logic, if market still has power and intention proceed higher, 1.29 level should survive. But this has not happened. It tells that probably long-term downmove continues.
    Currently I do not see any more possibility for market to show upward retracement in medium term. If major 0.618 support that also was an Agreement has not survived, why lower and minor levels should hold market? Especially taking into consideration bearish trends on all time frames.
    It seems to me, that we should start to search entry point for short enter. Currently market has reached MPS2 and minor 0.786 support. On 4-hour chart it has accomplished AB=CD pattern, so we at some support. Nice level to search for short opportunity is K-resistance around WPP 1.2950-1.2970. Also it could be in a form of B&B on daily time frame.
    Since I do not see currently any hints and patterns of potential retracement, it is difficult to predict when it will come, but we be on guard and use it whenever it will happen.
     

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    #2 Sive Morten, May 12, 2012
    Last edited: May 15, 2012
  3. Sive Morten

    Sive Morten Special Consultant to the FPA

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    EUR/USD Daily Update, Wed 16, May 2012

    Good morning,
    Every kind of price action makes its own problems to trader. So, during thrusting move and trend this problem is to catch entry point and retracement.
    On daily time frame market easily has passed through 0.786 support and reached 0.88 by now. This is also WPS3 by the way, although I do not use it. Second and most important moment is that market almost has reached daily oversold, at least stands very close to it.
    It means that probability of pullback becomes greater although we do not know will it happen or not.
    And finally, now we have perfect thrust down on daily - 100% context for either DPRO or B&B. If market will give us B&B - that will be perfect chance to join donward move.
    I suspect that daily previous lows will not hold and nearest target is 1.25-1.2520 area.

    On 4-hour chart trend is bearish, and the same levels - just moved a bit lower, since market shows new low.

    On hourly chart we see humble context for DRPO "Buy". Second cross has not happened yet. May be it will be interesting for those who trade on houlry chart. If we will get DRPO failure - will it be our chance to enter short without retracement on daily TF?
    Probably yes, there is just one think that disturb me in that way - daily oversold.
     

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    #3 Sive Morten, May 12, 2012
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  4. Sive Morten

    Sive Morten Special Consultant to the FPA

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    EUR/USD Daily Update, Thu 17, May 2012

    Good morning,
    overall picture has not changed much, market just gives us shallow hint on potential retracement. Since I mostly look for possiblity of B&B "Sell", there are two levels to use as entry ones. First is nearest 1.2827, and second is K-resistance 1.2911-1.2918. Taking into consideration the strength on downward thrust this could become nice oportunity if not to join long-term downward move, but at least get profit from B&B trade. Anyway it will let us to join the party safe.

    4-hour trend is bullish, we see the same levels here. Also this could become perfect and rare 3-bar DRPO "Buy", if trhust was not been interupted by retracement. This 0.382 retracement in the middle of the thrust forces us to look at this DRPO with suspicion and probably treat it as LAL. But this is the only pattern that exists on 4-hour time frame, that could justify upward retracement.

    Extension analysis on houlry chart shows that Fib extensions create two levels of Agreement with even closer levels - 1.2766 and 4-hour 1.2827.

    Since we do not know what depth of retracement will be, I suppose that it will not be bad idea to enter short gradually with scaling in at 1.2766, 1.2827 and 1.2910 areas.
     

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    #4 Sive Morten, May 12, 2012
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  5. Sive Morten

    Sive Morten Special Consultant to the FPA

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    EUR/USD Daily Update, Fri 18, May 2012

    Good morning,
    Just couple of moments could be added to previous update. First is 1.2610-1.2650 area. These levels are 1.618 extensions of AB=CD's inside of triangle that we've discussed many times. This will become support. Still, since market totally disrespect 100% estension targets, I do not count on solid respect here. Besides, market has broken final minor 0.886 Fib support, so it have free space till previous low now.
    I suspect that this low on daily chart will not hold, because weekly target stands below it around 1.25 level. So, if even retracement will come, it will hardly become too deep. Use all significant levels for gradual short entry.

    On 1-hour chart we see Butterfly "Buy" that has a potential reversal point right inside of 1.2610-1.2650 area. That could become additional reason of retracement. If market will totally work out butterfly to ultimate targets - market will be able to reach 1.2811 level. But will it happen or not - that's the question.
     

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    #5 Sive Morten, May 12, 2012
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  6. samuelken

    samuelken Private

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    good job keep it up,
    we love it.
    but Sive you need to give us something some times on GBPUSD
     
  7. ochills

    ochills Master Sergeant

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    Commander in Pips Beautiful week to You,
    Thanks for your priceless gift and for building people like us
    to attain Professional level in trading.
    Honestly you have haw eyes and they are very sharp for that 4H butter, I can never see it without U.
    good work Sir.
    thanks FPA thanks Mentor Sive.
     
  8. ochills

    ochills Master Sergeant

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    Hi Samuelken,
    I think in my opinion Commander in pips (Sive) is trying to build discipline in those that follow his analysis. Before the commencement of forex militay school Sive sometime deviate to GBP/USD and USD/CHF but now he has decided to stay just on one currency analysis since he preaches stay on one currency pair as a beginner in his forex militay school. But he still provide answers to questions in other currencies with detail explanation. I think this is good in my own judgement because this will help U to build and do your own analysis and U can ask him questios if you are skeptical. I love GBP/USD but what I usually do is to carry out my analysis before Sive post his own on EUR/USD after his post I will try and see if I miss any crucial point to be consider Pls note both analysis can never be the same. I only adopt his methodology but I do my in Excel.
    My observation about Sive is that he write forex militay school from his heart without keeping words and he his cautious of any illegality.
    best pips day frd.
     
  9. Damian1987

    Damian1987 Corporal

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    It looks to me that market is showing it's direction. Scenario of Weekly retracement to 1,35 - 1,38 is starting to fade. Selling an hourly rally more probably will result in benefits.
     
  10. Triantus Shango

    Triantus Shango Sergeant Major

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    i'd like to add... watch for the 2805-2815 area for potential start of retrace.
    also of note: MPS2 = 2820,WPS2 = 2802 and 127.2 fib ext on H1--that's a FE with A = 3162

     
    #10 Triantus Shango, May 14, 2012
    Last edited: May 14, 2012

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