FOREX PRO Weekly, October 26-30, 2015

[Sive Morten]

Fundamentals

Reuters reports euro on Friday continued its downward trend against the dollar following European Central Bank chief Mario Draghi's comments a day earlier that signaled further monetary easing could be on deck for the euro zone.

Europe's common currency checked in below $1.10, hitting a low against the dollar not seen since early August, and was down 3.05 percent versus the greenback for the week. It was the euro's worst weekly fall since May.

The euro also fell to a one-month low against the yen, down 1.4 percent for the week, its largest weekly percentage fall in six weeks.

ECB President Draghi on Thursday said the bank could accelerate its bond purchases, extend its asset-buying program, and further cut its deposit rate, currently at -0.2 percent.

"Draghi not only delivered, but he exceeded many dovish expectations," said Omer Esiner, chief market analyst at Commonwealth Foreign Exchange in Washington. "The risk of more monetary stimulus in the euro zone is broadly negative for the euro."

China's surprise announcement that it would cut interest rates for the fourth time this year spurred equity market surges around the globe, but traders retreated from China-linked currencies like the Canadian, Australian and New Zealand dollar that typically trend up on stock market rallies.

The loonie and kiwi both fell against the dollar after gaining in early trading. The Aussie tempered early gains, up 0.11 percent to $0.7210, after rising nearly 1 percent to a session high of $0.7296.

"There's a possibility that market participants look at

(China's rate cut) as less a positive sign and more a sign that growth is weakening more than is currently expected," said Brian Daingerfield, currency strategist for RBS Securities in Stamford, Connecticut. "There may be some (sense of) good news is bad news where markets look at the easing in China not as a good sign, but as a sign that growth today may be weaker than we currently see."

The muted gains in China-linked currencies also reflected the U.S. dollar's strength through the day. The greenback was up 0.6 percent versus the yen at 121.40 yen . It was up 0.8 percent against a currency basket at 97.172, boosted by continuing gains against the euro.

Euro CFTC data does not include yet recent miserable plunge numbers. Thus, these numbers probably are not as important as they could be. Anyway, Open Interest grows recently, while speculative short positions were decreasing. The obvious conclusion here is that Open interest mostly was driving by long positions. But something tells me that this picture will drastically change on next week due most recent events. So, currently we mostly will rely on technical picture and fundamental data, that is ECB comments.

Open Interest:

Speculative Longs:

Speculative shorts:

Technical
Monthly

In the beginning of monthly part of weekly research we think it will be useful to turn again to cross-sector analysis. Since we have a bit lack of fresh data on sentiment analysis.

First is, take a look at Dollar Index and our 2-weeks ago markings.

What do we have here...The journey has started from huge and extended AB-CD pattern that we've discussed even in Nov 2011. Market has not stopped at 1.0 extension and passed it as it does not exist. But it has not quite reached 1.618 extension and turned to forming of DRPO "Sell" and it has been confirmed.
But instead of dropping down market has formed bullish grabber that suggests taking out of 100.60 top. Appearing of the grabber looks logical, since market stands between target and will gravitate to 1.618 extension, since upside rally right to 1.0 extension was very fast. Bullish momentum here is strong.
In the beginning of the month - Index stand slightly low than grabber's bottom and I was a bit surprised and started to think that DRPO could work, although initially I was a bit skeptic on its perspectives. But right now status quo is coming back. Although theoretically DRPO is valid, since market has not broken yet 5/8 FIb resistance, but recent action with long shadows and fast returns tells that mostly DRPO is doomed here. I do not know your opinion guys, but for me this picture looks mostly supportive for dollar, rather than tells about it's weakness.

Now, let's go further - Gold, but priced in EUR:

We have bullish grabber, guys and it suggests that gold should rise in relation to EUR. It could happen either by gold growth per se, or by EUR faster weakness to US dollar compares to gold one. Other words - EUR could fall faster than gold.

That's being said, if you combine two pictures together you will get only one possible scenario - EUR will loss it's value. October month has not closed yet and situation changes very rapidly, but currently it looks as we just have discussed.

Now let's take a look at EUR directly...
Last time we were surprised by negative NFP numbers and rally that has started right after it. And we've decided to monitor market for 1-2 weeks to get a clarity - whether it will lead to significant sentiment changes or will fade out.

Now we clearly see that second statement comes true. NFP effect mostly was temporal and totally fade out right now. This is very strong sign, since it shows durability of EUR weakness.

Speaking on monthly grabber... previously we've said that it has been cancelled since market has moved above it's top. But right now it seems that it is still could work, since it looks like on dollar Index chart.

Even beyond grabber picture shows bearish signs - as market has reached 1.27 target of butterfly - EUR has turned to logical 3/8 retracement. Since acceleration to first target was fast, it increases chances on further drop to 1.618 level and this will be parity.

Also, we have bearish flag here that also suggest downside breakout as normal progress.

Finally, as we previously said - despite the depth of current upside retracement, we still will treat it as bounce, if even EUR will reach 1.20-1.22 area. Market too long stands in downward action, especially during recent year and market has solid bearish momentum.

That's being said, analysis of monthly chart mostly leads us to conclusion that market mostly is bearish.

Weekly

Last time we've said:

"By letter guys, we have bullish trend here. But recent action, market mechanics tells that something has broken in this bullish mechanism. After market has completed upside AB=CD pattern and hit overbought - we've got logical retracement down.
But take a look what has happened next. EUR was not able to re-establish upside action. Market already was out from overbought burden, and couldn't continue move higher. Last week EUR has dropped below MPP."

And currently market just confirms this suspicions. If we carefully will take a look at this picture we will find other bearish signs that can't be seen on monthly chart. First is - possible bearish dynamic pressure. Market stands inside the flag for long time already, but broken MPS1 works as Rubicon line - all upside rallies were stopped there. So, trend is bullish here, but price action stands flat, no signs of upside thrust.

Second conclusion is based on classical tech. analysis feature. Take a look that last week EUR was not able to reach upper border of the flag, but reversed in the middle and dropped back to lower border. Usually this happens at the eve of breakout. And do not rely on bullish grabber that we have got here - this is just occasion.

On short-term perspective we could get some upside bounce, mostly because EUR stands at MPS1 and Fib support.

Daily

Daily picture barely has changed. This chart shows that breakout process has started already. But It has small chances to succeed immediately, because EUR stands at oversold and strong weekly support area. It is very probable that market will stop dropping for some time and show upside bounce.
Besides of weekly targets here we have short-term one - AB=CD @1.0865 and major 5/8 Fib level Agreement:

4-hour
Since drop just has finished and no patterns have been formed yet - right now it is difficult to suggest how deep this retracement will be. But, we could make some assumptions.
The highest acceptable level is 1.1250-1.13, because this will be crossing of trend line and WPR1+Fib level. Since market is strongly oversold on daily chart, deep retracement is possible.

Most probable level is K-resistance around 1.1180-1.12, and finally the minor one is 1.1120 and WPP, but hardly market will stop there. This retracement seems too small in current conditions.

Later we will be able estimate final destination better. It will depend on pattern that will be formed. For example, H&S on hourly chart could lead market to deeper retracement than B&B "Sell" , etc...

Conclusion
Last week action has confirmed our previous conclusion that it is too early to talk on big shift in sentiment and EUR has proved it by recent bearish culmination. Thus, our long term context is still bearish with extended target at parity.
On next week we need to wait reasonable upside bounce before taking short position, because it is not quite reasonable to go short right now - at daily oversold and support.


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.

 

[ochills]

Thanks Commander Learning under you is a great Privilege.
U 4got to add updates.
thanks a million.

My View on USD/CAD

 

[Sive Morten]

Good morning,

Reuters reports today the dollar was mostly lower in Asia on Tuesday, taking its cue from a broad move lower in regional equities and caution ahead of the U.S. Federal Reserve's two-day meeting that begins later in the session.

MSCI's broadest index of Asia-Pacific shares outside Japan skidded 0.7 percent, as China's key share indexes gave up more than 1 percent.

Adding to the risk-off mood, the U.S. Navy sent a destroyer within 12 nautical miles of artificial islands built by China in the South China Sea, in a challenge to Beijing's territorial claims there.

"It looks like a traditional risk-off move, with Asian stock markets down," said Sue Trinh, senior currency strategist at RBC Capital Markets in Hong Kong, who added that safe-haven currencies like the yen were outperforming the risk-proxy currencies like the Australian dollar.

"The Aussie in particular is underperforming, so the U.S. dollar is stronger against the Aussie."

Frequently used as a China play because of Australia's significant trade with that country, the Aussie slipped about 0.1 percent to $0.7235, and also shed about 0.6 percent on the 87.23 yen.

The greenback began the Asian session already on the back foot, after disappointing U.S. home sales data pushed down Treasury yields and prompted investors to pare bets that the Fed would opt to hike interest rates before year-end.

Data released on Monday showed new U.S. single-family home sales fell to near a one-year low in September after gaining for two straight months.

The disappointing figures backed expectations that the U.S. central bank will leave rates near zero on Wednesday, at the close of a two-day meeting beginning later in the session.

"The arguments for a 2015 rate hike are fading," Kathy Lien, managing director of BK Asset Management, wrote in a note to clients.

"More specifically, while we are long-term dollar bulls, the 'trader' in us sees a greater chance of dollar weakness going into and after this week's FOMC meeting," she said.

Against its Japanese counterpart, the dollar gave up about 0.4 percent to 120.58 yen, moving away from a 2-month high of 121.60 yen touched on Monday ahead of a Bank of Japan meeting on Friday.

While Japan's central bank is set to cut its price forecasts in a semi-annual report also due out Friday, many BOJ officials would prefer to hold off on expanding the bank's massive stimulus programme.

Divergent monetary policy expectations underpinned the greenback against the euro, which was buying $1.1064, up about 0.1 percent from late U.S. trading. Investors expect the European Central Bank to eventually expand or extend its asset purchase programme to support the euro zone economy.

The dollar index, which tracks the U.S. unit against a basket of six rival currencies, was down about 0.2 percent at 96.691.

The yield on benchmark 10-year Treasuries notes stood at 2.040 percent in Asian trading, down from its U.S. close of 2.058 percent. The yield scaled a two-week peak of 2.099 percent on Friday.

The futures market implied traders see only a 7 percent chance of a rate hike on Wednesday and a 34 percent probability of a rate increase at its next meeting in December, according to the CME FedWatch program.

Today guys, we will take a brief look at CAD. Our EUR setup is working - EUR has started upside bounce, but nothing interesting has happened yet. Something tells me that dovish Fed comments will be what we really need, to trigger deep upside retracement that we're waiting for.
Meantime (till Fed meeting) CAD will complete our B&B target and if comments really will be dovish - this will let us to enter short as we've initially planned. So, on daily CAD is nothing new. Market still tries to move higher and finally hit B&B target. It is just few pips rest:

At the same time, 4-hour chart tells that upward action could be slightly higher. Because CAD right now stands above 1.0 extension of H&S AB-CD pattern. It means that next logical destination is 1.618 that stands around 1.3280. Also this area will be strong resistance - MPP and WPR1. That's why we probably should look for entry slightly higher level than major 5/8 resistance on daily chart. Currently it is unclear still how particularly market will turn. Right now we could recognize possible 3-Drive "Sell" pattern, but may be something else will be formed a tomorrow:

 

[Sive Morten]

Good morning,

Recent Reuters comments - dollar edged closer to a 2-1/2-month high against a basket of currencies on Wednesday as traders awaited clues from the Federal Reserve about the timing of a U.S. interest rate increase.

A rate hike at the Fed's two-day policy meeting which ends later on Wednesday is virtually priced out due to underlying concerns over a slowdown in China and the broader impact on global growth.

But many investors still expect the Fed to indicate that interest rates could rise as early as December.

Ahead of the Fed outcome, the dollar index has moved in a narrow range this week.

"Heading in to the FOMC, it's fair to say that market consensus is that there will be no change, but if there's any risk, it would be toward a hike, so therefore, intuitively, if you needed to put your cash somewhere, your safest bet would be the dollar today," said Bart Wakabayashi, head of foreign exchange for State Street Global Markets in Tokyo.

"Tomorrow, we could be looking at all different big figures in all different currencies," he said. "But even though the U.S. numbers last night were quite bad, the dollar was still able to maintain support."

Tuesday's U.S. economic data did not back the case for a rate hike, with both durable goods orders and consumer sentiment falling short of market expectations.

"Recently, we had a run of soft U.S. data, retail sales, industrial output, trade and now durable goods. None of these really support a rate hike," said Masatoshi Omata, senior client manager of market trading at Resona Bank.

Non-defense U.S. capital goods orders excluding aircraft, a closely watched proxy for business spending plans, slipped 0.3 percent last month, against median forecast of a flat reading, with August figure also downwardly revised to a 1.6 percent decline.

Separately, the Conference Board's consumer sentiment index fell to 97.6 this month from a reading of 102.6 in September, despite median forecast of a small rise to 103.0.

The euro , which was knocked by European Central Bank chief Mario Draghi's surprisingly dovish stance last week that opened the door to further monetary easing in December, fell about 0.1 percent to $1.1034. But the single currency stayed above Monday's 2-1/2-month low of $1.0989.

ECB Executive Board member Benoit Coeure said late on Tuesday in Mexico that the bank may need to cut its deposit rate further if inflation rises towards its target more slowly than previous expected.

"The German two-year yields are already trading at around minus 0.3 percent. You could say that a 0.1 percentage point cut in deposit facility rate to minus 0.3 percent is already priced in," said Masafumi Yamamoto, chief currency strategist at Monex Securities.

The yen stood at 120.41 to the dollar , having risen to this week's high of 120.16 on Tuesday after the below-expected U.S. durable goods orders data.

The Bank of Japan's policy meeting on Friday also looms large for the yen, with traders split on whether Japan's central bank will expand its stimulus.

The BOJ is set to cut its price forecasts in a semi-annual report which is also due on Friday, but even in light of this, many BOJ officials would prefer to hold off on expanding the bank's massive stimulus programme.

The Australian dollar tumbled more than 1 percent to a three-week low of $0.7109 , after surprisingly soft Australia's inflation data bolstered expectations of a rate cut by the central bank next week. It last stood at $0.7120, down nearly 1 percent.

The British pound steadied after it slipped to a two-week low on Tuesday after data showed Britain's economy slowed more than expected in the third quarter, fuelling concern that a period of rapid expansion is coming to an end.

Gross domestic product growth slackened to 0.5 percent in the three months to September from 0.7 percent in the previous quarter. Economists had forecast a drop to 0.6 percent.

Today, guys, we will take a look at NZD. CAD by the way indeed has moved 50 pips above B&B target and hit our predefined levels and targets. Now just watch for reversal patterns there and opportunity for short entry.

On NZD we have really nice setup that could be triggered today, on Fed comments. Necessary condition for start is dovish comments from the Fed and chances on them are not small...
On weekly chart we have excellent B&B "Sell" setup that is ready to start - market has reached 50% Fib resistance and weekly oversold:

At the same time, on daily picture we have upside AB=CD pattern. It's a bit skewed but still it works. NZD has hit 100% extension and now stands just few pips below 1.618 target. Particularly here we need this dovish comments from the Fed. In this case market could take final leg up to hit the target and trigger B&B "Sell".

On 4-hour chart it could happen by nice butterfly "Sell". So, as you can see picture looks very harmonic. All that we need is just Fed dovish comments to launch this stuff. So let's keep watching...

 

[Sive Morten]

Good morning,

Reuters reports today - The U.S. Federal Reserve kept interest rates unchanged on Wednesday and in a direct reference to its next policy meeting put a December rate hike firmly in play.

Investors had expected the Fed to remain pat on rates, but the overt reference to December came as a surprise.

The central bank also downplayed recent global financial market turmoil and said the U.S. labor market was still healing despite a slower pace of job growth.

"In determining whether it will be appropriate to raise the target range at its next meeting, the committee will assess progress - both realized and expected - toward its objectives of maximum employment and 2 percent inflation," the Fed said in a statement after its latest two-day policy meeting.

Investors quickly placed bets reflecting a higher chance the U.S. central bank will raise rates in December, with futures contracts implying a 43 percent possibility compared to 34 percent prior to the statement.

"The Fed is seriously considering a December rate hike," said Harm Bandholz, an economist at UniCredit in New York.

Going into the Fed meeting this week, the market had viewed March as the most likely time for the central bank to begin its rates "liftoff," but it now sees a greater chance of that happening in late January.

The U.S. dollar rose sharply and yields for U.S. government debt soared in anticipation of higher rates. U.S. stock prices initially fell but regained momentum and closed sharply higher.

Michael Feroli, a former Fed economist now at JPMorgan, said the Fed statement was the first since 1999 in which policymakers pointed to a possible rate increase at the next meeting.

"By specifically referring to that meeting they are basically testing the waters a bit," said Aneta Markowska, an economist at Societe Generale in New York. She described it as a

"subtle attempt" to gently nudge the market in that direction.


LEAVING DOOR OPEN

The Fed has been struggling to convince investors a rate hike was imminent in the wake of data this month that showed U.S. employers slammed the brakes on hiring in August and September.

But it countered the skepticism on Wednesday by saying even slower hiring was still enough to get it closer to its goal of maximum employment.

Central bank policymakers also pointed to "solid rates" of growth in consumer spending and business investment, while eliminating a reference from their previous statement warning a global economic slowdown could sap U.S. economic strength.

Fed Chair Janet Yellen has been saying for much of this year that a rate hike would likely be needed in 2015 to keep the economy from eventually overheating.

More recently two Fed governors urged caution over rate hikes while questioning Yellen's views on inflation, though such doubts appeared muted in Wednesday's statement.

The Fed now has several important economic readings to parse, including two monthly employment reports, before it makes up its mind on whether to tighten policy at its Dec. 15-16 meeting.

It will also get a chance to see how monetary policy easing in Europe, Japan and China plays out in financial markets. Easy money policies abroad push the dollar higher, hurting U.S. exporters and making it harder for the Fed to get inflation back up to its 2 percent target.

That may explain why the Fed sought to leave the door open for a rate hike rather than paint the economy as fully ready for a monetary policy tightening.

"The Fed has dialed down its anxiety over international developments, but it's best to play it safe," said Brian Jacobsen, a portfolio strategist at Wells Fargo Funds Management in Menomonee Falls, Wisconsin.


The dollar held strong near 2-1/2 month highs against the euro on Thursday, after the Federal Reserve signaled it may raise interest rates in December, highlighting the divergent monetary policies of the world's most influential central banks.

While the Fed is preparing the ground for an eventual lift off in interest rates from record lows, the European Central Bank is widely expected to add to its ultra-loose stimulus before the end of the year to boost inflation and growth.

Against the dollar, the euro was lower at $1.0918 , having lost 1.2 percent on Wednesday, after the Fed, which kept its rates on hold as expected, took an unusual step of strengthening its language about timing in its statement, bringing a December rate hike back on the table.

In another hawkish tilt, the Fed also took out a warning about slowing global growth, going against earlier speculation that China's cooling economy could delay a rate hike in the United States. As a result, money market futures are pricing in about a 50 percent chance of a rate hike in December, compared to around 30 percent previously.

"Of course, the decision will ultimately depend on the data released in the coming weeks, in particular price data and the labour-market reports for October and November," said Antje Praefcke, currency analyst at Commerzbank. "Nevertheless, the Fed will soon withdraw from the expansionary race. As a result, the dollar will appreciate, in particular versus the euro...."

"The Fed's statement is open to interpretation. But for those who have been waiting for a December rate hike, it could be taken as paving the way for that," said Daisuke Uno, chief strategist at Sumitomo Mitsui Bank.

Many investors are still not convinced about a lift-off given a recent run of soft U.S. data, making economic releases in coming weeks, starting with the advance reading of U.S. GDP due later on Thursday, more crucial in determining the a December move.

Economists also expect a key U.S. manufacturing index due on Monday to show the first contraction in the sector in 2-1/2 years, which would not be conducive for a rate hike.

The yen, which had fallen after the Fed's statement, recouped much of its previous day's losses after Japan's industrial production beat market expectations, which in turn reduced the chance of an immediate BOJ policy move.


So guys, based on comments above it is clear why USD is rising - Fed has given relatively hawkish comments on December rate hike and rally on dollar is just a priced-in 50% odds on rate increase in December. It means that if rate will be raised - dollar could drop as event will passed out. Also USD could drop in December because nobody promises rate hiking cycle. Fed could rise rate ones but what's next?
Anyway, we've discussed this yesterday when we've said - we expect dovish comments, because they will open a lot of trading setups on different currencies, but hawkish comments could change the picture. Just look at our recent discussion on NZD, this is very good example - butterfly was not formed and kiwi just plunge down.

In fact, today is not a big deal what currency to discuss because almost the same situation across the board. Since NZD has setup in progress, let's complete our analysis here.
The background and major context for trading stands on weekly - this is B&B "Sell" Trade. On daily chart, as market has dropped yesterday, we've got another DiNapoli directional pattern - DRPO "Sell" and it was confirmed yesterday. So, daily pattern triggers and confirms weekly one:

Meantime on 4-hour chart market has completed an Agreement - AB=CD pattern right at first Fib support and today we should be ready for bounce up:

Based on picture above 0.6740 level seems suitable for short entry. It will be K-resistance and former low that was broken. Here market just confirmed our talks. Dovish comments from the Fed should trigger upside leg and form Butterfly, while, as we've said hawkish comments probably will lead to breakout of triangle and this has happened...
Also, last part of this AB=CD is butterfly "buy" that confirms chances on upside retracement:

So today probably will be some "relief session", while on Friday may be we will get real chance to join B&B pattern here.

 

[Sive Morten]

Good morning,

Reuters reports today The dollar bounced against the yen on Friday, as a report that Japan may unveil a supplementary budget lifted risk appetite and helped the greenback pare earlier losses.

The U.S. currency had earlier dipped to as low as 120.29 after the Bank of Japan stood pat on monetary policy, disappointing some speculators who had bet that the central bank would expand its already massive stimulus.

The greenback received a reprieve, however as Tokyo stocks pulled out of the red following a report by the Nikkei newspaper that Japan's government is considering compiling a 3 trillion yen ($24.77 billion) extra budget in preparation for the trans-Pacific trade pact.

The safe-haven yen often moves in inverse correlation with Japanese stocks, falling when investor risk appetite improves.

All the same, the dollar was capped by caution ahead of BOJ Governor Haruhiko Kuroda's press conference at 0630 GMT when he is set to elaborate on the central bank's decision.

The Japanese central bank appeared confident that a tight job market will lift wages and consumption sufficiently to push inflation towards its 2 percent target.

"The reaction by dollar/yen to the BOJ decision was smaller than I expected. While the view among economists may have been split down the middle regarding what the BOJ would do today, market players seemed to have mostly priced in the possibility of no easing," said Masafumi Yamamoto, a senior strategist at Monex in Tokyo.

"There is still the Japanese GDP to be released in November, and those who still think the BOJ will ease later this year have a chance to build their case after first gauging the data," he said.

Friday's BOJ decision had drawn more attention than usual after a run of downbeat Japanese indicators had fanned expectations that the central bank could further expand stimulus.

"I think today's decision was appropriate and came as I expected. The biggest factor is that the U.S. Fed stood pat this month but has left open the possibility of a rate hike in December. The BOJ will probably wait to see whether the Fed may move in December, before deciding to ease further," said Hiromichi Shirakawa, chief economist at Credit Suisse Securities in Japan.

The euro was steady at $1.0981 <EUR=> after gaining about 0.5 percent overnight on an unexpected improvement in euro zone economic sentiment and signs of faster-than-expected inflation in Germany.
The data helped the common currency bounce from a 2-1/2-month low of $1.0896 struck midweek following the Federal Reserve's hawkish stance. The Australian dollar nudged up on bargain hunting but remained shaky after taking hits earlier in the week on the back of the Fed's statement and rising risks of a rate cut at home. The Aussie was up 0.3 percent at $0.7097 but remained within an arm's length of a 3-week low of $0.7067.

So, today nothing really interesting on EUR, we still wait for meaningful bounce for taking short position. At the same time, CAD has turned to bearish action and our suggestion on possible reversal down as B&B will be finished has been confirmed. So keep shorts there..
On weekend we will talk on GBP, now it is really interesting setup forming and situation needs an update. But today - let's finish our discussion of NZD.

On NZD we expect starting of B&B trade, or better to say it looks like it has started already. But yesterday on market has reached solid support area - Agreement on daily chart and we've come to conclusion that we need to wait for bounce up. Now it stands in progress;

Market has formed DRPO "Sell" to start action with weekly B&B pattern. Currently we have to keep close eye on upside retracement. NZD should not climb and close above 5/8 Fib resistance. IF this will happen - according to DiNapoli, this will mean DRPO "Failure" and our setup will be vanished.

On 4-hour chart initially we said that it would be perfect if NZD will stop around K-resistance area, but it has passed through it rather easily. This is not good sign of cause for bears, but still nothing lost yet. Next destination point will be precisely the same Fib resistance and, take a look - broken trend line of former triangle

Hourly chart also confirms the same area. Market right now moves with AB-CD extension, it already has passed through 1.0 extension and next destination is 1.618 around 0.68 - slightly higher than Fib level is. Thus, we should get Agreement resistance in this area

Actually guys, deep retracement has some advantages for us either. THus, it will let us to place very close stop, because 5/8 level is final edge, if market will break it up, then bearish setup will be destroyed. That's why we do not need to place stops somewhere above the highs.

 

[Premkumar]

Thank you for the news
Keep up the good work , its really great to be here

 

[stelore]

Good morning Sive,
thanks a lot for your update and great analysis!!!

Wishing you a nice and profitable week

 

[ochills]

Based on Commander in pips analysis on USD/CAD. In my opinion, I think Market has started reacting for downward move based on B&B buy Completion target and reaching of strong resistance levels (MMP, WPR1, H4 butterfly completion, 3-drive,1.618Fib ext. & trend line resistance)

 

[stelore]

Good morning Sive,
I was out during FOMC rate decicision, What happened?!
Rate hasn't changed, why EURUSD dropped so much?

Thanks a lot
Ste