FOREX PRO Weekly November 21-25, 2011

EUR/USD Daily Update, Thu 24, November 2011

Good morning,
Happy Thanksgiving everybody,

Probably today is better to spend time with your family, but for those who can't live without trading there is some interesting issue.

Today's market will be thin probably, due to holiday. On daily time frame we see, how market will accelerates through solid area of support around 0.786 level + pivot support.
In general, on daily time frame we hardly can count on solid retracement till 1.3242 target will not be hit. Weekly chart assumes even lower move...

So, our context for today's session stands at 4-hour time frame. We see that market has not quite reached 1.618 target of butterfly and turned to some retracement. Also downward thrust looks nice - this is acceptable context for B&B "Sell" trade. It is hard to predict from which level it could start, I can say only that either from 1.3381 or 1.3414-1.3418. Second is more probable, since B&B usually reaches significant level of resistance before start.
Also I dare to suggest that the target of this move will not be limited by common 0.618 support of whole counter move, because major tragets stand below current market. That's why it should proceed at least to 1.33

That's being said, wait for sell patterns on lower time frames around 1.3414-1.3418 K-resistance (although it could happen from 1.3381 also - so, this choice is up to you how to enter). Target at minimum 0.618 support form whole retracement up, but more probable further continuation to the downside.
 

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EUR/USD Daily Update, Fri 25, November 2011

Good morning,
Yesterday market has shown very nice B&B “Sell” that we’ve discussed. On daily time frame market continues to drift right to our 1.3242 area. Our medium-term target is around 1.2850.

On 4-hour time frame market stands right at 1.33 – completion point of our Butterfly “Buy” that we’ve traded during the week. 1.3294 is monthly pivot support 1. Just below the market are stand 1.618 extension target of AB-CD pattern and 0.886 Fib support from daily swing up.
Also market gives us some hint on potential bullish divergence right at the completion point of Butterfly.

On hourly time frame we see another butterfly “Buy” with 1.27 target slightly below of 4-hour Butterfly 1.618 target. 1.618 target of hourly butterfly stands in agreement with 1.618 AB=CD pattern and daily 0.88 support.

That is a riddle for you. In general this is not bad context to try to trade it. Stop should be placed at least below 1.3250, I suppose, because we do not know from which point market could start a retracement. This is definitely should be a retracement since overall context is bearish.
How you will enter, from which level and where you will place stop – this choice is up to you. Probably this will not be a bad idea to enter with small lot right from 1.33 area and add more, if market will reach 1.3260. But this is very personal.
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Does not look like a correction up is coming and a butterfly buy will materialize... What do you guys think?
 
Yep, it could be so - everyday is not a Sunday...
Still market now at 1.618 of hourly butterfly, we'll see.
 
I have noticed that the last few days the dollar S&P correlation has been particularly strong. (It has always existed, but the past few days even more so). I am watching the S&P for clues, and the index is steadily falling.
 
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