NEW!!! British Pound Forex Pro Weekly, September 06-10, 2010

Sive Morten

Special Consultant to the FPA
Messages
12,965
Monthly
Now on monthly time frame two scenarios are possible. I do not show you butterfly “Sell” pattern (I know, guys, you like butterflies), because now a bit early for that, but this is the first scenario. Second scenario – market can continue its move to the upside to 100% expansion 1.7778 area. Although these scenarios seem different – there is one thing that common for both of them. This is a move to 61.8% expansion 1.6422. Here is why… If you’re attentive enough, you can estimate, that “C” point on the chart – 1.4227 is precisely 0.786 Fib support from AB move. This is typical level for Butterfly. So, move to 1.6422 seems logical, because this is also 0.786 resistance from BC-move, and 0.786 retracement is typical for Butterfly patterns.
It’s obvious that if market intends to move to 1.7778, it definitely will reach 1.6422. Now pay attention to blue line. This is Oscillator predictor and it shows level of overbought. For now we can call 1.7778 area as “Logical” because it far to the upside beyond some strong resistances levels (have not shown here) and deeply in overbought area. At the same time – 1.6422 – is logical objective point and it creates strong resistance that includes 61.8% target, overbought area and 0.786 resistance. But why I look only to the upside currently and not to the downside? Because monthly trend is bullish, and it will be canceled, if only market will break C point to the downside.

So, currently I expect move to 1.6422 on a monthly time frame. This assumption will be canceled if market will move below 1.4230 area and trend turns bearish. Around 1.6422 price action can turn to butterfly “Sell” formation. But it’s a bit early to talk about.

Weekly
On weekly time frame situation is very similar to EUR/USD. This is also possible a upward momentum trade. During the strong thrust up market has been stopped by Fib 0.618 resistance, oversold level and monthly pivot resistance 1 and retraced lower, precisely to Weekly Confluence support area. Market could hold above monthly pivot point. The one difficulty right now is that no sign of reversal to the upside here, on weekly chart. But looks like market nestles in support. We should check for lower time frames for some signs of thrust. If it exists – everything is Ok, if not – then we should wait. The target of this momentum trade is 1.5750 area - 0.618 resistance and monthly pivot resistance 1 currently.


Daily
Daily trend is bearish, but weekly is bullish, and it will be bullish till 1.50 area. IT means that current move down we should anticipate as retracement. At the same time situation is not as nice as on EUR/USD. Confluence support 1.5323-1.5347 holds the market for the time being, but I do not see any thrust yet. Market is forming parallel channel right now. Just below the market is strong support – Fib. Confluence support and weekly pivot support 1 at 1.5322. What do we do then? First of all, I will be looking for upper breakout. If it will happen, we should be aggressive to come aboard. Personally I intend to buy first AB-CD retracement in the case of breakout, especially if trend turns bullish (it will happen around 1.5550) . Also I’ll be tracking the trend. But possibly we can possess ourselves on breakout earlier. Let’s look at lower time frame.


4-hour
I do not see any meaningful signals just yet on this time frame except bullish convergence, but would like to note a couple of moments. First of all, 4-hour trend is bullish. Now look at two bars in ellipse on the chart – here market has tried to shift trend to bearish and failed. Possibly it will lead us to the previous highs at 1.55 area. Second, there are two interesting levels to watch for on Monday or Tuesday (because of Labor Day). The first one is 1.5441-1.5450 – Fib. support and weekly pivot point and 1.5421-1.5425 Confluence support area. Possibly, if market will hold above them, we can possess on the long side, but… Daily trend is bearish still. There will be more comfort to enter long, when daily trend will turn bullish. Although this would be worse price to enter, but this will be safer. Because now I can’t exclude the possibility of reaching 1.5350 support again – because we are in channel, and daily trend is still bearish…

That’s being said, in long term I think that Cable can reach 1.6422. In mid term and short term, although I have a sense that this move has started, but from technical point of view I need some confirmation from the market. Because this is just a sense, what if I’m wrong?
Personally, I will be looking for channel breakout and I prefer to see it to the upside. Then I think that should be aggressive and buy the first AB-CD retracement. The nearest target is 1.5750 area. The main beacon from the other side – is 1.5350 area of support. If market will break below it, then, possibly down move will continue.



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.
 

Peter Mack

Private
Messages
12
Furtures vs Spot on the GBP

Sive,

I've been an ardent follower of your splendid analysis on the EUR, executing my trades on the CME futures instrument (symbol 6E,) which I've found to track the spot EUR/USD pair almost pip-for-pip.

I was delighted to see your addition of the GBP and JPY -- but the first thing I said to myself was, "Whoa - guess I'm going to have to switch to spot." Then I became delighted all over again when I saw that your analysis on the JPY is for the futures instrument, which trades backwards from the spot pair. So here's my question: do I assume correctly that your GBP analysis is also on the CME futures instrument (symbol 6B)?

PeterM
Washington DC

P.S. - I've been less comfortable with interchanging the futures and spot data on the GBP than on the EUR. At times I would find up to about a 9 pip difference between the 6B and the GBP/USD pair-- especially right after contract rollover.
 

Sive Morten

Special Consultant to the FPA
Messages
12,965
So here's my question: do I assume correctly that your GBP analysis is also on the CME futures instrument (symbol 6B)?

PeterM
Washington DC

P.S. - I've been less comfortable with interchanging the futures and spot data on the GBP than on the EUR. At times I would find up to about a 9 pip difference between the 6B and the GBP/USD pair-- especially right after contract rollover.
Hi Peter
Yes. GBP also is a CME futures contract.
 

Vladon

Private, 1st Class
Messages
34
Thank you for your analysis, Sive. And especially for not choosing the USD/GBP pair. :)
 

goldl

Recruit
Messages
1
Demo Account

Hi Sive: Thank you for the analysis

Will you be tracking your new calls through a demo acct?

Also, will you be restarting the EURUSD demo acct?
 

faxxaff

Private
Messages
21
Nice analysis. Now, I understand why so many traders are bullish about GBP although the economic indicators from UK have been by far the worst in comparison to other large EU economies.
 

omo9ja

Private, 1st Class
Messages
29
can't believe u mentioned 1.530 and a move to the upside began right there?
 

drexyl

Recruit
Messages
3
thnx very much sive.

actually i was hoping you could posts some analysis on cable before. and now you just did. thnx very much, this is really a big help!


drexyl
Philippines
 

Sive Morten

Special Consultant to the FPA
Messages
12,965
GBP/USD Daily Update, Tue 07, September

Good morning,

In my weekly research I've expressed some worries that market can touch previous lows again. So, now looks like this probably will happen.

Although yesterday's market was thin, Cable has should sell-off. On the daily chart there are not many changes. One important thing - market stays below weekly pivot point.
On the hourly chart there are some moments that are worthy to discuss here.
First of all - look at hourly trend (the red line). Trend turns bullish, but price action does not confirm it and continue to decline. I expect that this will lead to the renewall of a previous lows, some kind of Wash and Rinse of previous lows - market can show move down, will reach weekly pivot support 1, clear out stops, and return back.
This scenario will not cancel the possibility upper breakout, because all this action is inside the parallel chanell.
So, if price action will develop precisely as I've described - this will be bullish sign. If we will see some thrust to the upside on hourly chart, and hourly trend will turn bullish -we can possess ourselves for the upper break out.

If market will move down and break daily Confluence support and weekly pivot support 1 - better stay aside for a while.
 

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