FOREX PRO WEEKLY, September 12 - 16, 2016

[Sive Morten]

Here, guys I would like to say couple of words on Kerry and Lavrov meeting. This is absolutely major event of 2016 year. And this status is confirmed by absolute silence that stands around this event in mass media (that belongs to inner US enemy). Tell me, do you remember any case, when US and Russia holds coversation for 14 hours - and then no information in mass media? It means that they have made crucial decision, absolutely new globe order. Europe, Middle East are just fragments, the part of discussion and not major one. The major part is alliance of US and Russia that holds in secret. I will explain. Things that I will say are not mine, but person, policial analysts that I rely on and trust absolutely.
The necessity of this alliance comes form inner situtiation in US, when country in fact is governed by non-government shadow fources in interest of narrow group of people. Decisions that they make globally stand againt interest of US country and citizens. Official governors, Obama, Kerry and others now in trap and almost are hostages. I will show you just one example. Recall when Benjamin Netanyahu has come to US, ignore Obama and talked to Congress directly, demanding more weapon and support. Despite all objections from President, official position of US and obvious mismatch of this solution to US interests - he has got what he was asking. Why? Because US are rulling not by government and not in the interest of US.
So, Obama can't rely on nobody and on no entity in US to struggle this parazites that usurped power. They are everywhere - in Government department, Military Fources, CIA, FBI, Congress etc. He can't use Mass Media, because they also belong to inner US enemy group. He needs some power outside US that could support them in this struggle. Of course this will make impact on total World Order. And this bet was made on Russia.
Now, first decision that has followed on recent meeting is treat Jabhat-an-Nusra (therrorist organisation, forbidden in Russia) not as moderate opposition but as real therrorist, as they really are. An-Nusra is an disguised army of Israel and Benjamin Netanyahu. They can freely move through the border on Golans, supported by Israel and now you probably understand for whom Netanyahu has asked weapon on his visit in Congress...
Obama already has warned people on possible turmoil in US, first this was on disaster speech in June (in FEMA), just few weeks ago - on possible civilian tragedies, growing of terror hazard, even in US. Because those who are rulling now - they do not want to loose this power and definitely will try to frighten people, spread chaos, break the people trusting and support to government, as they usually do.
That's being said - currently we do not see any signs of this yet on markets. But as soon as we will see first results of this battle - this will become very strong driving factor for all markets, especially for gold and USD. Keep up work with technical analysis, but keep in mind what we've just said here and don't be surprised when you will see some strange events and decisions in US. This is not some theory on global conspiracy. This is reality, meeting is over just 2 days ago. It lasts for 14 hours.
You could believe, you could not, just remember that we've talked above. If you will keep it in mind - you will easier undertsand some geopolitical events that should happen soon.

 

[ivans990]

Hello Sive, I just have a question about entry at DRPO. I understand the pattern and the mechanics. After second close above (AUD case here), do I wait for some retracement to enter or should I do it on closing level, when the pattern is confirmed? I have a same question for DRPO failure. Thank you.

 

[S.chakrabortty2011]

Dear Sive sir,

Can you kindly tell how to estimate the profit target of DRPO failure ?

Br//
Shishir

Good morning,

(Reuters) The dollar inched higher against the yen on Tuesday but remained below the previous day's high, having taken a hit after dovish comments from a Federal Reserve policymaker reduced bets that the Fed would raise interest rates this month.

Investors now see less chance of a U.S. rate hike next week after Federal Reserve Governor Lael Brainard on Monday warned against the Fed removing support for the economy too quickly.

"We can stick with our main scenario that the Fed won't raise rates in September. All the talk about a possible rate hike in September turned out to be noise," said Koichi Yoshikawa, executive director of finance at Standard Chartered Bank's Tokyo branch.

Fed Funds rate futures now pricing in only about a 15 percent chance of a rate hike at the Fed's next policy meeting on Sept 20-21, according to CME Group's FedWatch Tool.

That was down from about 35 percent in late August, when some Fed officials openly discussed the possibility of a September rate hike.

Against the yen, the dollar inched up 0.1 percent to 101.96 yen after falling 0.8 percent on Monday. The dollar remains below Monday's intraday high of 102.82 yen.

The yen has been steadily rising so far this year as investors grow skeptical that the Bank of Japan's massive stimulus over the past three years will have limited impact in boosting Japan's inflation.

For now, the Japanese currency is likely to move between 100 and 103 yen before the BOJ's policy meeting, to be held during the same two days as the Fed's.

The BOJ is expected to unveil the results of a comprehensive review of its policy it had promised in July, in which many market players believe the central bank will indicate its preference for a steeper yield curve to cushion the blow on banks from negative interest rates.

Some market players think the BOJ will only announce the framework of future easing without making a major policy change such as cutting interest rates further.

The euro EUR= was little changed at $1.1234.

There was limited market reaction to the latest Chinese economic data, which provided further signs of an improvement in China's economic activity.

China's industrial output grew the fastest in five months in August and exceeded market expectations, while retail sales also expanded more than expected.

"There's some relief about the economy and the concerns over China have receded a bit," said Masashi Murata, currency strategist for Brown Brothers Harriman in Tokyo.

Murata said moves in the Chinese yuan bear watching, however, given the possibility that China's trade surplus may start to shrink at a time when a decline in its foreign reserves point to a possible pick-up in capital outflows. Pressure on the yuan to weaken seems to be increasing somewhat, he added.

Data released last week showed that China's imports unexpectedly rose in August, while its foreign reserves fell to the lowest since 2011.

Europe will see UK consumer and wholesale inflation data at 9:30 a.m. (04:30 a.m. EDT) ahead of the Bank of England's policy meeting later this week.

A high inflation reading could dampen expectations of further easing by the BoE and lift the British pound.

Sterling held steady at $1.3335, having risen from levels seen at the end of last week when it traded at $1.3270.

So, as you can see EUR stands at the same price where it was on Fri. So no update is needed right now. That's why we again, as on last week, will take a look at tactical setups that we have on other currencies. Market has given us good opportunities on CAD and AUD, and right now we could get another ones.

Thus, on daily AUD our bullish hidden divergence is still valid, but we have no other new inputs:
View attachment 27345

So, we're mostly interested in what we have on 4-hour chart. Here we have another chances for DRPO "Buy" pattern. As you can see thrust down is perfect, on 1st close above 3x3 DMA AUD has not reached major 3/8 Fib level, so this is not a B&B trade. Now market is tending to show close below 3x3 DMA. Then, if we will get 2nd close above 3x3 DMA - this will be confirmation bar for DRPO "Buy". Minimum target is 50% of DRPO Thrust.
It would be much better if bottom of DRPO will take a shape of butterfly, and it will just make easier trading process.
View attachment 27346

The similar setup we have on CAD, but in opposite direction. To the right you cand see our previous trade - DRPO "Buy" that we've taken last week. Picture is almost the same as on AUD, but in opposite direction:
View attachment 27347

But recall that if DRPO fails - this is also directional pattern. So DRPO is pattern and DRPO Failure is also the pattern, but in opposite direction. So, you should be psychologically ready to reverse your position on 180 degrees if we wil get DRPO Failure. DRPO Failure will appear, if market will confirm direct pattern by second close below DRPO "(for CAD), but then wil return right back up and close above tops of direct DRPO pattern. But let's hope that we will not need it (LOL)

 

[Sive Morten]

Hello Sive, I just have a question about entry at DRPO. I understand the pattern and the mechanics. After second close above (AUD case here), do I wait for some retracement to enter or should I do it on closing level, when the pattern is confirmed? I have a same question for DRPO failure. Thank you.

There is no definite criteria - should you wait for retracement or not. By it's nature DRPO is very fast pattern. That's why you could wait, say for 3/8 retracement. Also it is important the time scale. On Hourly chart you probably could not wait, while on weekly - it makes sense, probably. You can use the buity of DRPO as a criteria. For example - strong long thrust and few candles between 1st and 2nd cross of DRPO tells that hardly we will get any retracement. While small thrust, more bars between 3x3 DMA crosses tells, that chances on retracement are greater.

On exchange traded markets you could track order flow/queue and see the pressure of selling/buyers orders. But this demands some experience and impossible on FX market. DiNapoli has an example of this in his book. Read it, this is very exciting, how he has traded S&P DRPO.

Can you kindly tell how to estimate the profit target of DRPO failure ?

Usually this is either some Fib extension or close 3x3 DMA in opposite direction. For example you have DRPO "Sell" Failure and took long position. You should close it when market will close below 3x3 DMA again. Sometimes better to use DRPO "Failure" not as isolated pattern but just a signal / trigger. And watch for other patterns that could specify target.