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FOREX PRO Weekly May 28 - June 01, 2012

Discussion in 'Sive Morten- Currencies, Gold, Bitcoin Daily Video' started by Sive Morten, May 26, 2012.

  1. Sive Morten

    Sive Morten Special Consultant to the FPA

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    Monthly
    Currently there are a lot of talks and rumors stand around Greece. Will it remain with EU or it will out? Some traders talk that it could support EUR. I still think that both ways will not stop EUR depreciation, because this event will not be able improve overall problems with huge budget burden. Greece is just a top of the iceberg, but underwater problems are huge and much greater than the top - Spain and Italy just to call any. So, what will happen if Greece will out? Although this possibly will save some money for EU, this will have another solid and huge impact – precedent of EU Zone destruction. This precedent will tell – EU is liquid substance – countries could “in” and “out”. So, in such circumstances how to believe in EUR? What is Union currency in this case? Since EUR is a second World Reserve currency, think what collapse could happen, would you be ready to trust any national currency, if country itself could be freely separated and fractioned?
    Second moment is breaking of union economy with Greece and breaking of union trading space. But we’ve talked about it. So, we come to conclusion that for EUR it will be much better if Greece will stay. Fast printing of EUR could lead to it’s depreciation but it will safe the core. That’s what most important. Hence, if Greece will stay it could lead to some EUR support and upward move on EUR/USD. But will it be trend change and reverse? Hardly. Appreciation will be equal to eliminating of Greece’s possible out risks. So, it probably will be just a retracement. Indeed, is it possible that just Greece remaining within EU will justify and trigger EUR growth against dollar? This is impossible. That’s why in long-term perspective we still count on dollar appreciation.
    Monthly time frame shows continuation of downward trend that is rather strong. Market shows solid downward thrusting candles and small retracement. After hitting 0.618 target market has shown just 0.382 retracement. Now we see fast continuation. I’ve redrawn resistance levels, since market shows new low. As you remember, we spoke much about weekly target around 1.2480-1.2530 area and possible retracement. Monthly chart also has reached although minor but still 0.786 support. Long-term target still at 1.16-1.1680

    [​IMG]

    Weekly
    So, market has reached our target that we’ve specified on previous week – 0.618 Fib extension of most recent AB=CD move. That is also some kind of Agreement with monthly 0.786 Fib support. Logically, some respect of this area should follow, at least shallow one. The fact that market moves below previous low and holds there tells that probably this is true breakout. Honestly speaking, taking into account EU problems and US improvement, makes me feel comfortable with downward move on EUR/USD. This is such kind of trend that supported by clear fundamentals that are perfect for long-term traders. Especially if we will take into consideration possible rate hike in US in 2014.
    Still on weekly time frame we can’t understand is there any sign of possible retracement or not. Let’s take a look at daily time frame.
    [​IMG]
    Daily
    On daily time frame we also see that market has hit daily oversold level by reversed hammer pattern. There are, in fact, no other signs or hints on potential retracement. We know that when market retraces during solid bear trend it usually retraces to weekly pivot resistance 1. For coming week this level stands at 1.2728. That is also 1.2700-1.2713 K-resistance level, and, take a look – trend will hold bearish only till that area. So, if we talk about perfect level as retracement final point, this level is very attractive. If retracement will stop there, this will be nice, since market also will remain below previous swing low. But again, that is just assumption of possible scenario. Since retracement has not started yet - it’s difficult to point any target of it. So we have to wait and sit on our hands and do not try to anticipate it.

    [​IMG]
    4-hour
    Trend turns bullish, market has reached 1.618 extension of previous retracement up. Also there is small stop grabber. The only one thing that I see here is slowdown of downward move – no significant patterns. As we’ve discussed in video, theoretically reverse H&S pattern could happen, since 1.618 ratio is very typical for that pattern and now we stand right at the bottom of the possible head. Still, as I’ve said higher, it’s better to wait for some market response and get some signs of retracement before counting on it.
    [​IMG]

    Hourly
    Trend turns bearish, market has reached first extension of our Friday’s Butterfly “Buy”. Theoretically it still could proceed to 1.618 around 1.2450. From another point of view, market has reached already targets and levels of higher time frames so there are not many reasons to proceed lower – only if there will not be any retracement at all.
    The safer way is to wait thrusting move up as retracement will start and join it at nearest deep. Aggressive way to enter is trade current butterfly. Retracement (if any) probably will start by this pattern, trading it will give you better entry point and may be tighter stop. Major risk of this tactic is some sort of catching of falling knife, because we have solid bearish trend. How you will act – this choice is up to you.
    [​IMG]



    Conclusion:
    Long-term traders should start to search an opportunity to join bearish trend, since monthly chart shows that it continues (at least now it looks so).
    In short term perspective situation a bit blur. In fact in current research we could make only assumption why retracement could happen and what level it could reach. But since we have no clear signs yet, but have strong bearish trend, we can’t act in a way like retracement has started again.
    You may stick with intraday reversal pattern with hope that retracement could start by it, but with overall strong bearish trend this will be not safe game to play.



    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.
     
    #1 Sive Morten, May 26, 2012
    Last edited: May 27, 2012
  2. Sive Morten

    Sive Morten Special Consultant to the FPA

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    EUR/USD Daily Update, Tue 29, May 2012

    Good morning,
    yesterday was a bit thin day, so it's difficult to comment, but still some changes have happened.

    On daily time frame market has tested WPP and moved lower. Also trend breakeven point has drifted lower. This could add some difficulty since if market will show retracement to our 1.27 level it will shift daily trend to bullish. Currently price action is coiling inside of reverse hammer pattern.
    To enter short I suggest to see one of the following moments. First is retracement to 1.27 level, second is breaking of previous low and holding below it. Since retracement could either test WPP and go or reach WPR1 - first thing has already happened, so there will not be any surprise if market just continue move lower. EUR usually shows shallow retracements during solid trends.

    On 4-hour chart there is another reason why I like 1.27 level - this is an ultimate target of Butterfly.
    On houlry chart I do not see anything interesting - no significant patterns that we can stick with or that could give us more information about retracement targets.
    So, today we can do just poor comentaries.
     

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    #2 Sive Morten, May 26, 2012
    Last edited: May 29, 2012
  3. Sive Morten

    Sive Morten Special Consultant to the FPA

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    EUR/USD Daily Update, Wed 30, May 2012

    Good morning,
    on daily time frame we still inside some support area. If you will build different weekly Fib extensions you'll find that there are a lot of them inside of 1.2380-1.2530 area. Also, as we've previously said this is minor monthly 0.786 support level. Trend holds bearish, slightly lower there is a WPS1.

    Everybody have succesfully recognized another butterfly on 4-hour chart and that is real help for us. 2 side-by-side butterflies usually create wedge pattern, although they could be more - 3 or even 4, but anyway this is usually accompanied by divergence and Wedge shape. That is what we see currently. Hence, we just need to wait for breakout.
    Actually here is a lot of objects to trade, depending on your context and style. Daily traders should wait, if you trade harmonic patterns - you may stick with recent Butterfly, if you trade classical patterns - here wedge is forming. If you trade divergences - there is also something for you. May be there are a lot of other possiblities on lower time frames.
    Since we speak mostly on daily basis - our trading plan for today is wait and watch wedge developing.
     

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    #3 Sive Morten, May 26, 2012
    Last edited: May 30, 2012
  4. Sive Morten

    Sive Morten Special Consultant to the FPA

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    Good morning,
    There is less and less hope that market will respect 1.2380-1.2530 area somehow more beyond retracement in the beginning of the week. Development is really strong - market just tested WPP and continue move down crushing and breaking weekly targets and monthly 0.786 level. Take a look at horror black candle on monthly chart, btw...

    Second moment is market has destroyed all potential reversal patterns on intraday charts - 4H Butterfly has failed miserable, as well as wedge pattern. Yesterday market has shown solid acceleration on daily chart.
    Still, today it stands at WPS1 and daily oversold. We can't expect solid pullback, but even small one will be sufficient for us.

    Major idea for today's trading session is 4H B&B "Sell" from 1.2440-1.2445. If we will see DRPO "Buy" still, then, probably we can count on some deeper 1.2460-1.2490, but I do not have much illusion of that. DRPO Failure also will be OK... Other words, today may be good opportunity to re-enter, or to add to positions. Also it is possible to trade these patterns per se.
    Nearest target is 1.2250 area - 0.88 monthly support level, but more significant is 1.20.
     

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    #4 Sive Morten, May 26, 2012
    Last edited: May 31, 2012
  5. Sive Morten

    Sive Morten Special Consultant to the FPA

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    EUR/USD Daily Update, Fri 01, June 2012

    Good morning,
    today's update will be short. There is only one thing to discuss to my mind - DRPO Buy LAL on 4 hour chart.
    It could work because fundamentally market has tired from EU negative, it does not react at negative news as it has done earier. Second - today will be released a lot of data, especially NFP report. This could add volatility to the markets and some negative deviation from expectation could be used by traders for profit taking. Also today is Friday and two weeks price action was tremendous.

    From technical perspective market has not quite reached 3/8 resitance yesterday. Although current potential DRPO is not perfect - it's bottom a bit skewed to the downside, but market has created new low with second bottom, so most short positions of recent swing down are still here. If you will take a look at 15-min chart, you'll see that second bottom in fact is Butterfly "buy".
    If on volatility price will trigger tighten stops - DRPO could work. Also advantage of this DRPO is due its intraday character - it could be traded today without holding position through weekend.
    Finally, this is the only pattern that is forming on the market currently. Probably you can find some other.
     

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    #5 Sive Morten, May 26, 2012
    Last edited: Jun 1, 2012
  6. Lolly Tripathy

    Lolly Tripathy Sergeant Major

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    As usual The Best analysis
    thank you so much for the kind help
    Wish you a wonderful n relaxing weekend...
    Have fun :)
     
  7. Lolly Tripathy

    Lolly Tripathy Sergeant Major

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    sir as u said if retracement will start rite from dis area 127.2 or after reaching 161.8% of the butterfly den 1.270-2728 area is a good area for add short.
    but which area is the next downward target last week 1.25 was our target so wts the next targett for the bear..??
    Thank you
     
  8. asif faryad

    asif faryad Sergeant

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    Hi Sive,

    I also wanted to thank you,as i am a very very consistent Trader thanks to your mentoring methods..
    I also using your methods have started with a couple of new pairs.. working well..

    Thanks wishing you as always great weekend..

    Ps: Sive i may be visiting Russia soon hope we can meet up will send you a pm nearer the time...

    Asif :)))))))))
     
  9. asif faryad

    asif faryad Sergeant

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    i would calculate 12350.00

    Depending on the type of trader you are you could try and lock in some profit for example 100 pips if you are trading weekly time frame... and then you can safely hold position and as Sive would say watch the movie!! :)
    I shorted at 13100 and 12900 and have locked 600 pips and watching what happens if we get back to 12700 will have made only 600 pips ....its a tough life!!!! :) Wishing you and all the other regular traders lots of pips!!!
     
  10. asif faryad

    asif faryad Sergeant

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    OPPS!!! last message in response to Lolys last post
     

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