1. This site uses cookies. By continuing to use this site, you are agreeing to our use of cookies. Learn More.

FOREX PRO Weekly May 16-20, 2011

Discussion in 'Sive Morten- Currencies and Gold Video Analysis' started by Sive Morten, May 14, 2011.

  1. Sive Morten

    Sive Morten Special Consultant to the FPA

    Joined:
    Aug 28, 2009
    Messages:
    12,310
    Likes Received:
    17,097
    Monthly
    So, guys, here you can see all importance of monthly overbought. Finally market has fallen into retracement that was awaited by positional traders and shown solid plunge.
    As we said during the previous week - the first area to watch is 1.4140 – previous highs and nearest Fib support – market has hit it. Overall current look is frightening. If market will close as it is – it will turn to huge bearish engulfing pattern. Although we can’t exclude that it could be canceled by the market but more probable seems the perspective of continuation at least till monthly Confluence support at 1.3655-1.3760. This 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.
    [​IMG]

    Weekly
    This time frame is especially interesting on coming week. Our expectations are linked to potential B&B “Buy” trade due to previous upside momentum. So, market usually tries to continue previous move mechanically, i.e. because of momentum. This very often leads to deep retracement up right after initial plunge. That’s what we waiting for. But this retracement usually starts from some solid support and not later than 1-3 closes below 3x3 SMA (chart #2). Speaking about the levels - there are just two that are suitable for that purpose – market has reached first one 1.4140. Second one – is weekly Confluence support at 1.3655-1.3760. Now market has shown two closes below green line already. And speaking from purity view of B&B “Buy” trade – I prefer to see its start from current support. 1.4140 is also a previous highs.

    Second important moment is that weekly trend has turned bearish. This fact forces us to be extra careful. Because when MACDP (red line) comes in play, the development during coming week could be twofold – market could show solid up move and form MACDP failure, i.e. trend shifting failure pattern. This will mean that we can count on taking out of previous highs and continuation of previous move up in terms of monthly Butterfly etc. The fact that market has closed slightly below 1.4140 has not canceled this level yet. Because this is weekly Fib support and this is more an area rather than sharp level. Second – if market will continue move down, then probably we will see 1.37 area.
    We should get some answer in the beginning of the week by keeping a close eye on daily time frame and pivot points trading.
    #1
    [​IMG]

    #2
    [​IMG]

    Daily
    There is only one important issue for daily time frame since previous week. If you trade on daily time frame, now you have bearish context, because weekly trend has turned bearish and daily trend is bearish. Hence you have to look for possibility to enter short.
    Speaking about overall picture – I do not see any interesting currently. Colored lines are weekly pivots. Market is not at oversold, which is 1.3880 for Monday. That’s why price could not show solid retracement in the beginning of the week. Usually in such circumstances market retraces to Pivot resistance 1 at 1.4335 that stands almost in one point with first Fib resistance 1.4388, 0.618 Fib resistance stabds at 1.4593 that coincides with daily overbought. That’s important.
    [​IMG]

    4-hour
    On this time frame now we clearly see that market has turned to parallel channel and gradually accomplished 3 from 4 potential targets. Hence, the next area to watch for is 1.3940-1.3960. This is pivot support 1 and 1.618 target from the same ABCD pattern. If we take a close look at price action inside channel that we’ll see that this is “plunge then AB-CD retracement.” This has repeated twice already. Just above the market I’ve pointed potential resistance levels. Taking into consideration that market is not at oversold on daily, then possibly it will be just AB-CD retracement to pivot point at 1.4195 that is also a 4-hour Confluence resistance 1.4192-1.4206. The potential target of weekly B&B is we assume that it starts right now will be 1.4593 – 0.618 resistance from whole move down. But this is just for information, so you could estimate it by yourself.
    So, if you’re scalp trader, you may try to enter short from pivot with stop above next Confluence 1.4254-1.4277 with target 1.3950.

    On the chart#2 I show you in simplified form, what we want to see, when B&B will start. Very often when market move out from channel it does it with Gartley “222” pattern. First we want to see how it hits 1.618 target, then – breakout form channel, and then AB-CD retracement to some Fib support, where we should enter long. It’s preferably, if market simultaneously will be above pivot point.
    Anyway, we have to see the shift in intraday momentum. Usually it looks like strong intraday thrust up after solid plunge down. And up thrust should have greater length than previous down move. But this is just an assumption; let’s see how it will develop in reality.
    #1
    [​IMG]
    #2
    [​IMG]

    Conclusion:
    Position traders:
    No signs to buy yet. Wait for clear signals on daily time frame.

    Intraday traders:
    There is a bearish context. Probably market will reach 1.3950 area before any pullback could start. Anyway, we need some turning in intraday momentum, prior to even think about long positions.



    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. georgeta

    georgeta Sergeant

    Joined:
    May 25, 2010
    Messages:
    157
    Likes Received:
    0
    some details

    Hello Sive!
    In your analisys you said, on Daily chart, that in such circumstances price retraces to WR1. Can you give some details? Is that very common?
    Thank you!
    PS please look at my eurgbp on last week Thread.
     
  3. Sive Morten

    Sive Morten Special Consultant to the FPA

    Joined:
    Aug 28, 2009
    Messages:
    12,310
    Likes Received:
    17,097
    Hi Georgeta,
    Usually, when market shows solid trend it moves like "touch pivot and go". But, when it turns to retracement usually, it reaches weekly pivot resistance1.

    Ok, I'll take a look.
     
  4. Paul McConnell

    Paul McConnell Private, 1st Class

    Joined:
    Jul 21, 2010
    Messages:
    66
    Likes Received:
    0
    Thank You Sive!

    Again and again a balanced outlook.
    How fortunate we are!
    Previous analysis measured deeper retracements than where we are at the moment and my take points at 1.3700 area where price will hop about creating a daily HS that will :(shoot us up into the promised land...
    C'mon, what do you think guys?
    Regard,
    Paul
     
  5. Paul McConnell

    Paul McConnell Private, 1st Class

    Joined:
    Jul 21, 2010
    Messages:
    66
    Likes Received:
    0
    Ahem

    As I speak, I have just noticed that my team at this moment in time have 3 BUY positions at 1.4086 1.4100 1.4110...
    And my wife says I should just go to bed....
     
  6. tun13

    tun13 Corporal

    Joined:
    Aug 26, 2008
    Messages:
    71
    Likes Received:
    42
    Hi Sive,thank you so much for your weekly analysis,it such a blessing to a trader like me,pls keep up d good work.Tunde 4rm Nigeria.
     
  7. ertore

    ertore Private

    Joined:
    Aug 20, 2010
    Messages:
    37
    Likes Received:
    0
    I have another confluence zone before that one

    Hi Sive:

    In my weekly analysis I have a weekl confluence zone in 1.4041-1.4005 area using minor reactions. I think bread and butter could start in that area. Just let us know your opinion.
     
  8. Sive Morten

    Sive Morten Special Consultant to the FPA

    Joined:
    Aug 28, 2009
    Messages:
    12,310
    Likes Received:
    17,097
    Hi Ertore,
    Probably you're right. Weekly pivot support 1 and 4-hour 1.618 target are stand in the same area.
     

    Attached Files:

  9. rashidin5178

    rashidin5178 Sergeant

    Joined:
    Oct 10, 2007
    Messages:
    244
    Likes Received:
    1
    Confluence Zone

    Hi Sive,

    I'm very new in forex world and would like to know which one is more stronger confluence zone...from big swing or small swing and back to our current market condition, which confluence zone do you favor?

    Sorry for asking.:)

    Best regards and wish u happy weekend day.
     
  10. Sive Morten

    Sive Morten Special Consultant to the FPA

    Joined:
    Aug 28, 2009
    Messages:
    12,310
    Likes Received:
    17,097
    Hi Rashidin,
    The higher the timeframe - the stronger Fib levels, but also wider...
    Both areas are important. But since 1.3960-1.40 area is closer - we should watch it first.
     

Share This Page