Fundamentals, Technical Analysis EUR USD September 5 – 9, 2011 Monthly, Weekly, Daily

Fundamentals, Technical Analysis
EUR / USD September 5 – 9, 2011 Monthly, Weekly, Daily

Monthly
Monthly
Today I offer you to look at monthly chart from a bit another angle and not just repeat previous thoughts about butterfly, flag or pennant and their targets. Still those issues are still valid – I just do not want to repeat them again. If you do not quite remember them, you may just re-read previous weekly research.
First I would like to discuss current consolidation. I do not see such kind of price action for a long time already. Something like that was in 2008 – but it was shorter in time. From the one point of view it tells about market indecision, but from the other – market is building energy. We see some inside months here – June was inside month, so as August also inside one.
Meantime officially monthly time frame has bullish bias – trend holds bullish, price action, in general, supports it. Yes, market has turned to some consolidation, but what’s the problem? No problems. But what we have to keep an eye on, to react in time on possible change in market bias?
I suspect that upward board is obvious – 1.50-1.51. Breakout of it could lead market right to previous highs around 1.60. But what’s about lower border? To my mind this is 1.36 level, because breakout of just previous low at 1.3811 could lead to just W&R, since there is a strong Confluence support just below it – 1.3655-1.3760. Also, take a look that MACDP comes very close to it. It means that we can hit two hares just with single bullet. Now it stands at 1.3576, but in October it will move a bit higher. So, if market will break 1.36 – we will get two in one – breakout of strong monthly support (that already will confirm bear strength) and shift the trend bearish. That will be reversal.
Currently, I again keep an eye on 1.4276 high. We can see that during four consecutive months market has tried to move lower and close below that level but failed every time. Currently we see next attempt to do that. And if this will happen in September – that will be the first bell to aware of downward reversal.
Upward targets stand the same, although it might happen that we will not need them in nearest future. Still, nearest target stands at 1.5081 – just above the previous highs – this is 0.618 extension from most recent AB-CD pattern. Next area to watch is 1.5272, but potentially it could turn to butterfly “Sell” pattern. The target of this pattern is 1.27 extension at 1.6027. Also it almost coincides with 1.27 target of bullish AB-CD at 1.5925 and with 1.0 Fib extension of most recent smaller AB-CD. From classical standpoint upward move should be equal to the mast of the pennant – that is 1.5866 area.

FOREX Monthly Analysis September 5 - 9, 2011 chart #1

FOREX Monthly Analysis September 5 - 9, 2011 chart #1


Weekly
When you will take a look at weekly chart, you will understand why I’ve told much about important levels on monthly time frame. Also you will see amazing structure and logic that could give us technical analysis. Remember what we’ve discussed on previous week – right, potential bullish dynamic pressure, since market has formed consecutive higher lows and does not support bear trend. The logical finish of such pattern as bullish dynamic pressure is trend shifting to bullish side. Now let’s see what market has shown to us…
Right, quite opposite signal is – bearish stop grabber right at 0.618 Fib resistance and Agreement. Do you see outstanding structure and logic? Market gives you absolutely clear pattern right at the moment when you expect some solution, some clue. In fact, weekly chart helps us much, since it gives us context at least for the whole nearest week or may be two, and that context is “down”. Keeping this signal, we have to use daily and intraday charts just to estimate an area where we can enter “short”. That’s the real beauty… Additional bearishness comes from bearish W&R – we’ve discussed that in daily updates and videos. The point is that previous week’s high has cleared out all previous highs above 1.45. But then market has returned right below it. By the way, if you remember, that was due daily bullish stop grabber…
So, I just want to remind you, that minimum target of bearish Stop grabber is previous lows at 1.3811. Since market has to exceed it, probably it will reach confluence support at 1.3650-1.3760. 1.4140 is not a Fib support any more, since it has been broken already. Weekly chart is not at oversold, so this target is quite reachable. Situation becomes really hot. Couple weeks ago we already have traded stop grabber – you can find it by yourself, I suppose, and it has worked well. Particularly due to this pattern market renewed the lows and formed 1.3811 level.
The failure point is 1.4550 area – the high of Stop grabber’s bar. IF market will exceed it and close above it, then this pattern will be treated as failed.
Forex Fundamentals, Technical Analyses EUR USD September 5 - 9, 2011 Weekly Chart #2

Forex Fundamentals, Technical Analyses EUR USD September 5 - 9, 2011 Weekly Chart #2


Daily
As we’ve said applying of this time frame is purely technical – just to estimate where we can enter short, since we already know our context for trading. So, what do we have here? Market has broken two consecutive daily confluence support areas one by one without any respect. This is the sign of real bears’ strength. Just below the market there are no strong supports. Next support stands at 1.41 – 0.618 major Fib support and monthly support1. Till that area market is relatively unlimited. Also it is not at oversold, so it gives us conclusion that down move will continue. So, where to enter?
Personally I like nearest Fib resistance 1.4320 area for many reasons. First, daily and weekly trends are bearish, market not at oversold as on daily as on weekly, market not at strong support – retracement, probably will be shallow, if it will be at all…
Second, this area also includes monthly pivot, trend line resistance and weekly pivot for coming week 1.4306. Also this area is very close to former daily Confluence resistance at 1.4270 – that will give additional protection.
Third, applying this area will give us excellent possibility to place stop. Safer stop should be placed above 1.4430 – 0.618 resistance and weekly pivot resistance. But, logically, market should not move above 1.4320. We see that bears are strong, so moving above that area will lead market above pivot and above trend line again – that is not support bearish bias. So, we can place stop even somewhere above 1.4350 I suppose. More precise we will say, when and If retracement will start.
Forex Fundamentals, Technical Analyses EUR / USD September 5 - 9, 2011 daily, chart #3

Forex Fundamentals, Technical Analyses EUR / USD September 5 - 9, 2011 daily, chart #3


EUR USD Daily Forecast Technical Analysis 09 5 2011
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Fundamentals, Technical Analysis
EUR / USD August 22 – 26, 2011 Monthly, Weekly, Daily

Monthly
As we’ve said previously current trading environment on monthly time frame is a bright example of indecisive sentiment of market participants. Since as US as EU hit market with turmoil, traders just can’t decide which problems are worse. Trading range on monthly chart has contracted significantly, June was inside month and August has all chances to become inside one also.
Monthly trend remains bullish so as price action. Recent AB-CD pattern develops strictly as in book – market has hit 0.618 Fib extension target and monthly overbought and turned to retracement. But this retracement is very shallow – as it has to be. Market could not even reach Confluence support and holds above nearest Fib support 1.4140 – it looks more like W&R of previous lows on lower time frames. Furthermore, price action shows strong purchases by candles’ long tales during recent 4 months. Bullish pennant is forming currently here. Market has corrected overbought and reached the middle between the blue bands of oscillator predictor.
So, as we’ve said in previous research recent price action is not match to market that turns in reversal. It’s more common for continuation market. Although overall small signs, if we will take them together, tell that up move continuation is very probable, I better treat current price action as “indecision”. May be it looks like bullish pennant and so on, but this is not just retracement – inside months and choppy behavior on daily time frame tell that although investors are not ready to sell, but they are not sure that EUR is better either. I dare to suggest that when market will get any EUR supportive news or something – price will continue move higher.
Nearest target stands at 1.5081 – just above the previous highs – this is 0.618 extension from most recent AB-CD pattern. Next area to watch is 1.5272, but potentially it could turn to butterfly “Sell” pattern. The target of this pattern is 1.27 extension at 1.6027. Also it almost coincides with 1.27 target of bullish AB-CD at 1.5925 and with 1.0 Fib extension of most recent smaller AB-CD. By the way, from classical standpoint upward move should be equal to the mast of the pennant – that is 1.5866 area.
The crucial area for bullish perspectives is 1.3650 – down break of pennant and Confluence support will tell us that probably we can’t count on upward move in nearest time.

FOREX Monthly Analysis August 22 - 26 , 2011 chart #1

FOREX Monthly Analysis August 22 - 26 , 2011 chart #1

Weekly
Weekly trend holds bearish. First, I just want to remind you our suspicions that we’ve discussed in previous research. If we will take a look at overall picture then we’ll see that the nature of up move and current move is different. Current action is not thrust. It looks like retracement, and probably upward move could continue. Who knows, may be current pullback is just a respect of strong support, but market has not quite reach it (monthly Confluence support). That’s why it’s hardly so. I don’t know but currently personally for me this environment looks more bullish rather than bearish. Here are some reasons for that. First, we clear see bullish dynamic pressure here. Look, market holds bear trend, but price action does not support that, market does not accelerate lower. Second, from classical perspectives, we see that bullish wedge or flag is forming. This is a consolidation but not an impulse move. Hence, this is a retracement.
Also we can treat this recent price action as Gartley “222” “Buy”.
Take a look at recent price action – market is forming higher lows with bear trend, so that has happened during recent week also. This is a confirmation of dynamic pressure. Now we have to keep an eye on that – will this tendency continue or not. That’s important.
And finally, pay attention to monthly pivot point. Do you see something different with it? Right, August is a first month in current consolidation, when price holds above the pivot for three consecutive weeks, although it has tried to press it down.
Also if you switch on your imagination you can find Butterfly “sell” pattern that is forming currently here…
Speaking about the targets – nearest one is 1.5081 – 0.618 Fib extension from AB-CD pattern, that is also a weekly overbought. Although dynamic pressure minimum target is clearing out the highs at 1.4925 – there are a lot of stops just above it. So, since they will be triggered, market definitely will accelerate further. Second area of targets is 1.5250-1.5270 – monthly AB-CD target.

Fundamentals, Technical Analyses EUR USD August 22 - 26, 2011  Weekly Chart #2

Fundamentals, Technical Analyses EUR USD August 22 - 26, 2011 Weekly Chart #2

Daily
This time frame remains as most difficult for analysis on coming week also. Some worry signs continue to exist on the market. Our H&S pattern has to come to some resolving, since right shoulder time has expired – 18 days (left shoulder lasts for 17 days). It should come to some solid move sooner rather than later and as I said, I do not like this splash outside of neckline. Although it has not reached previous highs and that was not W&R, this is not very well for H&S pattern.
Trading volume does not support typical H&S behavior. Particularly, during right shoulder, when market moves up, trading volume should increase. Here we do not see it. It’s vice versa – trading volume decreases, when market has tried to move higher. Further more – just look at trading volume during previous week, it was anemic.
From another point of view – daily trend has turned bullish, and market has stand above pivot during whole week.

Fundamentals, Technical Analyses EUR / USD August 15 - 20, 2011 daily, chart #3

Fundamentals, Technical Analyses EUR / USD August 15 - 20, 2011 daily, chart #3

On second chart we see that triangle was broken to the upside, but it has happened too lazy and market has revisited the line from the other side. From that point of view, lows around 1.42 area are extremely important, since if market will return back in the body of triangle, this will be huge disadvantage for bulls.

Fundamentals, Technical Analyses EUR USD August 22 - 26, 2011  Daily chart #4

Fundamentals, Technical Analyses EUR USD August 22 - 26, 2011 Daily chart #4

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Fundamentals, Technical Analysis
EUR / USD August 15 – 20, 2011 Monthly, Weekly, Daily

Monthly
As we’ve said previously current trading environment on monthly time frame is a bright example of indecisive sentiment of market participants. Since as US as EU hit market with turmoil, traders just can’t decide which problems are worse. Trading range on monthly chart has contracted significantly, June was inside month and August has all chances to become inside one also.
Monthly trend remains bullish so as price action. Recent AB-CD pattern develops strictly as in book – market has hit 0.618 Fib extension target and monthly overbought and turned to retracement. But this retracement is very shallow – as it has to be. Market could not even reach Confluence support and holds above nearest Fib support 1.4140 – it looks more like W&R of previous lows on lower time frames. Furthermore, price action shows strong purchases by candles’ long tales during recent 4 months. Bullish pennant is forming currently here. Market has corrected overbought and reached the middle between the blue bands of oscillator predictor.
So, as we’ve said in previous research recent price action is not match to market that turns in reversal. It’s more common for continuation market. Although overall small signs, if we will take them together, tell that up move continuation is very probable, I better treat current price action as “indecision”. May be it looks like bullish pennant and so on, but this is not just retracement – inside months and choppy behavior on daily time frame tell that although investors are not ready to sell, but they are not sure that EUR is better either. I dare to suggest that when market will get any EUR supportive news or something – price will continue move higher.
Nearest target stands at 1.5081 – just above the previous highs – this is 0.618 extension from most recent AB-CD pattern. Next area to watch is 1.5272, but potentially it could turn to butterfly “Sell” pattern. The target of this pattern is 1.27 extension at 1.6027. Also it almost coincides with 1.27 target of bullish AB-CD at 1.5925 and with 1.0 Fib extension of most recent smaller AB-CD. By the way, from classical standpoint upward move should be equal to the mast of the pennant – that is 1.5866 area.
The crucial area for bullish perspectives is 1.3650 – down break of pennant and Confluence support will tell us that probably we can’t count on upward move in nearest time.

FOREX Monthly August 15-19, 2011

FOREX Monthly August 15-19, 2011

Weekly
Weekly trend holds bearish. First, I just want to remind you our suspicions that we’ve discussed in previous research. If we will take a look at overall picture then we’ll see that the nature of up move and current move is different. Current action is not thrust. It looks like retracement, and probably upward move could continue. Who knows, may be current pullback is just a respect of strong support, but market has not quite reach it (monthly Confluence support). That’s why it’s hardly so. I don’t know but currently personally for me this environment looks more bullish rather than bearish. Here are some reasons for that. First, we clear see bullish dynamic pressure here. Look, market holds bear trend, but price action does not support that, market does not accelerate lower. Second, from classical perspectives, we see that bullish wedge or flag is forming. This is a consolidation but not an impulse move. Hence, this is a retracement.
Also we can treat this recent price action as Gartley “222” “Buy”.
There is couple of new moments that have appeared during recent week. First, closed week was an inside week – energy in market has increased. Second, take a look at recent price action – market is forming higher lows with bear trend. This is a confirmation of dynamic pressure. Now we have to keep an eye on that – will this tendency continue or not. That’s important.
And finally, pay attention to monthly pivot point. Do you see something different with it? Right, August is a first month in current consolidation, when price holds above the pivot for second consecutive week.
Also if you switch on your imagination you can find Butterfly “sell” pattern that is forming currently here…
Speaking about the targets – nearest one is 1.5081 – 0.618 Fib extension from AB-CD pattern, that is also a weekly overbought. Although dynamic pressure minimum target is clearing out the highs at 1.4925 – there are a lot of stops just above it. So, since they will be triggered, market definitely will accelerate further. Second area of targets is 1.5250-1.5270 – monthly AB-CD target.

FOREX  Weekly August 15 - 19, 2011

FOREX Weekly August 15 - 19, 2011 Chart

Daily
Here we come to most difficult time frame for analysis on coming week. Let’s start from our H&S pattern that we’ve discussed on previous week first. Even with this pattern there are some worries signs exist. On a first view – everything seems to be in order, but if you will take a close look – you’ll see. First, trading volume does not support typical H&S behavior. Particularly, during right shoulder, when market moves up, trading volume should increase. Here we do not see it. Vice versa – trading volume decreases during recent week, when market has tried to move higher. Second, market has not been able to close above weekly pivot. This is curious a bit, since during right shoulder buyers should dominate and market usually moves higher easier. That has not happened. Third, look at price action during the last week – it’s not very common for H&S – market just could not choose the direction, it has shown very volatile days with closes preferably in the middle of the trading days. Highs and lows stand at the same distance from weekly pivot point – so, market is more indecision rather than in bullish momentum. Additional confirmation to that is “high wave” on Friday.
Still, some bullish sighs hold on the market. This is a bullish dynamic pressure. Market is forming higher lows and MACDP will come in play on Monday, I suppose. This will be important moment – depending on what we will see, we will make judgment about further price action. If it will be stop grabber, then probably perspective of H&S will become blurrier. Crucial point of this pattern stands the same – 1.4041.
#1

FOREX Daily August 15-19, 2011

FOREX Daily August 15-19, 2011 Chart

And now we turn to most interest moment of daily time frame, why I’ve said that it’s very difficult to analyze it. Let’s decompose our H&S pattern so that you can clearer see different scenarios and why it’s very hard to predict perspective.
First scenario stands it a row with weekly expectations. This is Butterfly that I’ve asked you to imagine on weekly chart. Since market has shown only 0.618 Fib retracement, it has the chances to reach 1.618 target at 1.50. Now take a look at weekly chart again – see the target at 1.5081? This is also weekly overbought. So these two targets coincide in tight range. The failure point is low at 1.3811.
#2

FOREX Daily August 15 - 19 , 2011 chart #2

FOREX Daily August 15 - 19 , 2011 chart #2

And here is opposite view for you also – Butterfly “Buy” pattern with downward AB-CD. Although it has opposite direction, it also has some significant moment to previous butterfly and H&S pattern. First, take a look at AB-CD pattern. Nearest 0.618 target stands at 1.4103 – even if market will reach it, it does not cancel H&S and if market will start up move right from that area could lead to another smaller butterfly “sell” – try to find it by yourself.
Second, pay attention to strong support at 1.3922 area – this is AB=CD target and pivot support 1. Although reaching of that area will cancel H&S – it will not cancel butterfly “Buy” pattern.
Potential target of this pattern is 1.3620-1.3630 area – agreement of 1.618 AB-CD target and 1.27 butterfly target. The failure point is high at 1.4514.
#3

FOREX Daily Technical Analysis,  August 15 -19, 2011 Chart #3

FOREX Daily Technical Analysis, August 15 - 19, 2011 Chart #3

And to finally confuse you – here is contracted daily chart. When I saw such triangle on 2002, market has continued move higher… It also has needed some time to think, since it just has passed through parity of EUR/USD. So as in 2002 as now is crucial moment on the market, but of cause it does not mean that it will 100% happen again.
#4

FOREX Daily Technical Analysis August 15 - 19, 2011 Chart #4

FOREX Daily Technical Analysis August 15 - 19, 2011 Chart #4

#5 2002

FOREX Daily Technical Analysis,  August 15 - 19, 2011 Chart #5

FOREX Daily Technical Analysis, August 15 - 19, 2011 Chart #5

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Fundamentals, Technical Analysis
EUR / USD August 05 – 12, 2011 Monthly, Weekly, Daily

Monthly
US has shaken markets with problems of debt ceil and yesterday S&P has decreased credit rating of US to AA+ – 1 grade lower with negative forecast. It means that rating could be reduced to just AA during nearest 1-1.5 year if nothing will change. I suppose that it will happen, since increasing of debt ceil does not change the core – they can’t increase it infinitely. Even now demand for France, Germany and Canada bonds exceeds demand for US Treasuries. By reducing rating of US S&P increases cost of borrowing for them, since their payments to serve its debt will become even higher. Approximately 1 grade of rating costs 0.5% of yield. It means that those steps that they was intended to take to reduce budget deficit will be insufficient, since they will have to pay more on debt serving. Even more, the cost of loans inside of country will grow – it could lead to reducing of borrowing in mortgages and consumer credits, so the second leg of recession now as close as never. Taking into consideration poor pace of economy (1.8% in QII) and stagnation in real estate and unemployment, consumer credit and retail sales could lead to dire consequences. But this is a bit extended perspective.
EU, in turn, shows problems of Spain and Italy and there are more and more thoughts that they could not escape Greece’s path. Second impact right in the back of ECB was by Bundes Bank. Its authorities told that they do not support buyback of problem debt – Greece and potentially Spain and Italy.
So, currently market stands in some stupor – too much events and they are too significant. That’s why now we see outstanding plunge in equities and other risky assets and growth in demand for safe-haven – JPY and CHF, Germany bonds, may be Australia and Canada bonds. Despite the interventions, probably we will see further growth in Swiss franc till current doom and gloom will not be resolved somehow or calmed down a bit. Investors need time to think, to assess current situation…
Current trading environment on monthly time frame is a bright example of indecisive sentiment of market participants. Since as US as EU hit market with turmoil, trades just can’t decide which problems are worse. Trading range on monthly chart has contracted significantly, June was inside month and August has all chances to become inside one also.
But technical analysis shows a bit clearer picture and it shows that EUR stands in favor. Monthly trend remains bullish so as price action. Recent AB-CD pattern develops strictly as in book – market has hit 0.618 Fib extension target and monthly overbought and turned to retracement. But this retracement is very shallow – as it has to be. Market could not even reach Confluence support and holds above nearest Fib support 1.4140 – it looks more like W&R of previous lows. Furthermore, price action shows strong purchases by candles’ long tales during recent 4 months. Bullish pennant is forming currently here. Market has corrected overbought and reached the middle between the blue bands of oscillator predictor.
So, as we’ve said in previous research recent price action is not match to market that turns in reversal. It’s more common for continuation market. Overall small signs, if we will take them together, tell that up move continuation is very probable.
Nearest target stands at 1.5081 – just above the previous highs – this is 0.618 extension from most recent AB-CD pattern. Next area to watch is 1.5272, but potentially it could turn to butterfly “Sell” pattern. The target of this pattern is 1.27 extension at 1.6027. Also it almost coincides with 1.27 target of bullish AB-CD at 1.5925 and with 1.0 Fib extension of most recent smaller AB-CD. By the way, from classical standpoint upward move should be equal to the mast of the pennant – that is 1.5866 area.
The crucial area for bullish perspectives is 1.3650 – down break of pennant and Confluence support will tell us that probably we can’t count on upward move in nearest time.

eur usd monthly chart August 05 - 12, 2011

eur usd monthly chart August 05 - 12, 2011

EUR USD Monthly Chart 05 - 12,  2011

EUR USD Monthly Chart 05 - 12, 2011

Weekly
Weekly trend holds bearish. First, I just want to remind you our suspicions that we’ve discussed in previous research. If we will take a look at overall picture then we’ll see that the nature of up move and current move is different. Current action is not thrust. It looks like retracement, and probably upward move could continue. Who knows, may be current pullback is just a respect of strong support, but market has not quite reach it (monthly Confluence support). That’s why it’s hardly so. I don’t know but currently personally for me this environment looks more bullish rather than bearish. Here are some reasons for that. First, we clear see bullish dynamic pressure here. Look, market holds bear trend, but price action does not support that, market does not accelerate lower. Second, from classical perspectives, we see that bullish wedge or flag is forming. Since on previous week market has created additional candle, so you can draw it differently – may be somebody draw it more as parallel channel – this does not change the core. This is still a consolidation but not an impulse move. Hence, this is a retracement.
Also we can treat this recent price action as Gartley “222” “Buy”. Now pay attention how price action has developed on current week – market has shown deep move to 1.41 area but returned right back above monthly pivot point. This is a bullish sign.
Speaking about the targets – nearest one is 1.5081 – 0.618 Fib extension from AB-CD pattern, that is also a weekly overbought. Although dynamic pressure minimum target is clearing out the highs at 1.4925 – there are a lot of stops just above it. So, since they will be triggered, market definitely will accelerate further. Second area of targets is 1.5250-1.5270 – monthly AB-CD target.

EUR USD  Weekly Chart  August 05 - 12, 2011

EUR USD Weekly Chart August 05 - 12, 2011

Daily
Finally daily time frame gives us clearer picture, because during previous two weeks it was really the task to analyze the market and make forecast. So, let’s start as usual from initial AB-CD pattern. Market has hit 1.0 Fib extension at 1.4433 and turned to retracement. And we said, that this pattern still has chances to show continuation to 1.618 target at 1.4708 while market will hold above 0.618 Fib support at 1.4080.
So, what do we see currently? Market has shown huge “Piercing in the clouds” pattern right from this support level. This gives us some advantages. First, we can use particularly this pattern and base our entry just on it. The low of this pattern is a crucial level for bullish scenario. If market will take it out – it will erase this pattern and probably initial AB-CD. This will be strongly bearish. But I somehow have some confidence that this will hardly happen. Second advantage is that crucial level stands very close to current market and it allows us significantly reduce risk of potential position.
Also market shows greater AB-CD with the same target at 1.4744 but it stands beyond daily overbought, so nearest target for coming week is 1.4444-1.4475 – 0.618 Fib extension from great AB-CD and pivot resistance 1.
Daily chart gives us nice information that is in a row with bullish suspicions due monthly and weekly charts.

EUR USD Daily Technical Analysis August 08, 2011

EUR USD Daily Technical Analysis August 08, 2011

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Fundamentals, Technical Analysis
EUR / USD August 01 – 05, 2011 Monthly, Weekly, Daily

Monthly
During previous week market has closed at the same level as week before – just 4 pips difference. So, there is nothing new to add to previous monthly analysis.

Monthly Fundamentals, Technical Analyses EUR USD

Monthly Fundamentals, Technical Analyses EUR USD

Monthly trend is bullish and as we’ve said in previous research recent price action is not match to market that turns in reversal. It’s more common for continuation market. Price has hit monthly overbought, 0.88 Fib resistance, and after all it just has reached nearest Fib support at 1.4140. Second, although it seems was broken, market still has not reached Confluence support and now it looks more like W&R of previous lows. This is not very typical for situations when market really intends to move lower. It looks like the downward power is not so great, at least currently. Also take a look at price action during the recent couple of months – two hammers. Sellers try to press down, but buyers return all right back, hence EUR purchases even from nearest retracement levels are significant. So, overall small signs, if we will take them together, tell that up move continuation is very probable. Furthermore, recent price action looks like bullish pennant pattern, so I suggest that it looks like bullish wedge on weekly time frame, we’ll see…
Nearest target stands at 1.5081 – just above the previous highs – this is 0.618 extension from most recent AB-CD pattern. Next area to watch is 1.5272, but potentially it could turn to butterfly “Sell” pattern. The target of this pattern is 1.27 extension at 1.6027. Also it almost coincides with 1.27 target of bullish AB-CD at 1.5925 and with 1.0 Fib extension of most recent smaller AB-CD. By the way, from classical standpoint upward move should be equal to the mast of the pennant – that is 1.5866 area.
Still, from another point of view, if you draw trend line and link lows at 1.1874 and 1.2870, then you will be able to see that this trend line nicely holds upward move. From that perspective retracement in July to 1.37 Confluence support will be normal, since it precisely will reach this trend line.
The crucial area for bullish perspectives is 1.3650 – down break of pennant and Confluence support will tell us that probably we can’t count on upward move in nearest time.

Monthly Fundamentals, Technical Analyses EUR USD August 01 - 05 2011

Monthly Fundamentals, Technical Analyses EUR USD August 01 - 05 2011

Although we’ve spoken also about 3-Drive “Sell” pattern in previous researches, here I do not mention it, since I hope that you remember it. Besides, it has almost the same potential reversal point as AB-CD pattern – 1.5250 area.

Weekly
Weekly trend holds bearish. First, I just want to remind you our suspicions that we’ve discussed in previous research. If we will take a look at overall picture then we’ll see that the nature of up move and current move is different. Current action is not thrust. It looks like retracement, and probably upward move could continue. Who knows, may be current pullback is just a respect of strong support, but market has not quite reach it (monthly Confluence support). That’s why it’s hardly so. I don’t know but currently personally for me this environment looks more bullish rather than bearish. Here are some reasons for that. First, we clear see bullish dynamic pressure here. Look, market holds bear trend, but price action does not support that, market does not accelerate lower. Second, from classical perspectives, we see that bullish wedge is forming. Since on previous week market has created additional candle, so you can draw it differently – may be somebody draw it more as parallel channel – this does not change the core. This is still a consolidation but not an impulse move. Hence, this is a retracement.
Third, inside the wedge Butterfly “Buy” pattern has been formed (we discussed it previously) and now market acts as it has to – shows nice upward week after pattern has been completed. Also we can treat this recent price action as Gartley “222” “Buy”. Previous week, as we see was formed as “high wave” pattern that means indecisive market. Price has reach upper resistance of wedge and market needs more fuel to go higher. We can’t exclude move to lower border again, since we discuss H&S pattern on 4-hour chart that assumes move to 1.41 area.
Speaking about the targets – nearest one is 1.27 of Butterfly at 1. 4934, slightly about the highs. But this is the same as 1.5081 – 0.618 Fib extension from AB-CD pattern, because 1.50 is significant level, and there are a lot of stops, just above the high at 1.4925. Since target of butterfly is higher – stops will be triggered and market will easily fly to 1.50-1.51 on execution of these stops.
Second area of targets is 1.5250-1.5270. It includes 1.618 Butterfly extension target and monthly AB-CD target.
Still, currently fundamental events and data come on first stage and could change overall picture drastically. The major question is what Obama ’s administration will do on Monday, since US have to pay out debt around 30 B USD. During the August US have to pay about $360 B. They have not raised debt ceiling yet, so where and how they will find the money. That’s the question. Will they sell assets, or they will rise debt ceil without Congress or something? They have no time left already. So be prepare to doom and gloom on the markets.

Weekly Fundamentals, Technical Analyses EUR USD 01 08 2011

Weekly Fundamentals, Technical Analyses EUR USD 01 08 2011

Daily
Trend is still bullish currently. Still, on previous week we’ve actively discussed bearish engulfing pattern that appeared in the beginning of the week and looks like H&S pattern on lower time frame. The target of this pattern, as we’ve said, at least theoretically is 1.41-1.4150 area, that is coincides with daily 0.618 major Fib support around 1.4080.
Still, market has bounced up from strong support area – 1.4189-1.4245 and tested it once. On next week there are two support levels will be added to it – pivot support 1 at 1.4202 and monthly pivot point at 1.4235. I can’t exclude that market could bounce from it again. That is concerning short term view.
In longer term perspectives, and from weekly/monthly point of view, this potential move down is just a retracem.. Even on daily time frame we see strong acceleration to 1.45 – right to 1.0 of AB-CD pattern. Retracem. to 0.618 Fib support is very typical after so strong price move. I’m telling that entire staff for purpose to warn you, that since this is a retracem. it could not matches our expectation about potential target. Depth of retracem. is much harder to predict, because they are very variable and unstable, compares to momentum moves. That’s why even if we wait move to 1.4150 – don’t be surprised if market retest 1.42 and go. Nevertheless don’t be afraid too much – we make researches daily and if something will go not as we assume – we will correct our trading plan.

Daily Fundamentals, Technical Analyses EUR USD 01 08 2011

Daily Fundamentals, Technical Analyses EUR USD 01 08 2011

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