Thread: Closed: Discuss EUR/USD News with a DailyFX Analyst

Originally Posted by Paul Chin

Last Friday, price was rather "bullish", and some even call it "short squeeze". I would have expected a squeeze to be at least 200 pips.. .still, it was unexpected that it can test such high levels of close to 1.323.

The cloud has formed the right pattern for a bearish move, until such time when the cloud changes to support a bullish view, I'll advise caution on taking a long in such circumstances.



Like a catapult getting ready to shoot, the further it pulled, the further it shoot, unless it snapped

I agree with your assessment of the timing of the impeding downmove but not the extent of the move.
Is there any significance in your upper resistance clouds changing their color to green? Or in your support clouds rising so much so than at the previous bottom? Why is your down arrow drawn so much lower relative to the support clouds than the price was at the previous low???

Originally Posted by Paul Chin

When the blue cloud gets above the green cloud, does that mean bullish strength? Actually no, it forms a series of clouds in the correct sequence to push the price down - Blue above Green, Green above Pink.

Attachment 123806

It is going to happen soon, not yet. The highlighted range between 1.3208 and 1.3083 is significant again, given that the timing is not right yet, there's a good chance that this is the range we can expect today.

Good luck!

Originally Posted by rcopadilla

I agree with your assessment of the timing of the impeding downmove but not the extent of the move.
Is there any significance in your upper resistance clouds changing their color to green? Or in your support clouds rising so much so than at the previous bottom? Why is your down arrow drawn so much lower relative to the support clouds than the price was at the previous low???

Dear rcopadilla,

To understand why the colour change, you will need to understand how each cloud is formulated. The colour is based on moving pivots over 50% rule, so if price rises above the 50% rule, it's expected that the moving pivot will be higher than the 50% rule, and thus the colour will be green. This is a visual aid to determine the trend and range at one view. I like to keep things simple, and colour makes things easier to see.

Regarding the down arrow, why it's so short??? Well, because my cloud cannot tell how far the drop will go, I'm just highlighting the direction it's expected to move for the coming week.

Hope this answers your questions. Good luck!

Originally Posted by Paul Chin

Dear rcopadilla,

To understand why the colour change, you will need to understand how each cloud is formulated. The colour is based on moving pivots over 50% rule, so if price rises above the 50% rule, it's expected that the moving pivot will be higher than the 50% rule, and thus the colour will be green. This is a visual aid to determine the trend and range at one view. I like to keep things simple, and colour makes things easier to see.

Regarding the down arrow, why it's so short??? Well, because my cloud cannot tell how far the drop will go, I'm just highlighting the direction it's expected to move for the coming week.

Hope this answers your questions. Good luck!

Thanks for the reply. Still am wondering if the rising support clouds have any significance?
I try to allow for unexpected possibilities when coming up with a gameplan. If the plan is correct, it can be followed with good accuracy. If an unexpected event happens, sometimes it is a warning to invalidate the plan or even fade the plan.

I'm already short so I am biased to wanting the price to go down. I have to constantly fight trading bias in order to avoid tunnel vision. The unexpected is for the price to go up first. Things are overbought on the intraday charts so more up at this point will likely be short lived. But once the intraday charts become oversold again and things align for an upside reversal, I expect higher highs.

The weekly chart looks to be heading back up to hit its falling Boll20 upperband (1.3495-). After that happens, the influence of the monthly charts should kick in and the price action should head downwards to meet the rising monthly lower Boll20 (1.2657+).
If a higher low forms and a CCI cross over occurs, the monthly charts will have then become very bullish.

While this slower bigger picture stuff gives a good background from which to form a trading bias, there is just not enough details to derive timing information. The intraday charts provide sufficient detail so that one can indeed time the market.
EUR/USD Monthly Chart

Originally Posted by rcopadilla

Thanks for the reply. Still am wondering if the rising support clouds have any significance?
I try to allow for unexpected possibilities when coming up with a gameplan. If the plan is correct, it can be followed with good accuracy. If an unexpected event happens, sometimes it is a warning to invalidate the plan or even fade the plan.

I'm already short so I am biased to wanting the price to go down. I have to constantly fight trading bias in order to avoid tunnel vision. The unexpected is for the price to go up first. Things are overbought on the intraday charts so more up at this point will likely be short lived. But once the intraday charts become oversold again and things align for an upside reversal, I expect higher highs.

Dear rcopadilla,

I know why you are short, so am I. Maybe we'll both be "short squeezed", I'm not very concerned about that though.

Regarding the rising support cloud, it has a significance. Imagine you are looking at an hourly chart with a moving average, it is rising with price above the MA. It is bullish. Then you look at the 4 hourly chart with the MA of the same setting, you see price is below the MA, do you conclude that it is bullish and you want to be long? But supposed you only consider the hourly chart, will you want to be long? I don't think your trading methodology is based on this, but you should get my point.

One simple rule to Multiple Time Frame analysis is that: The Larger TimeFrame will OVERRIDE the smaller TimeFrame, in cases of conflicts occuring. So for my clouds, all the timeframes appear in one, so which cloud do you think I will listen to?

It doesn't matter if my analysis is right most of the time. People choose not to believe that price is predictable for trading purposes. The moment my views are wrong, posters will be eager to step out to point it out. I do not believe the clouds to be right all the time either, but if it is going to be bullish, the cloud patterns will change to support this, and it takes time for it to materialize, and by then, I can simply switch mode to play long. Not a big problem at all...

For now, the clouds are bearish. Hope this clarifies.

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Good Morning everyone.....

Great explanation there Paul,,, I agree in some regards to your statement.... the statement that I am about to make has no consideration of the the current trading situation. I have have found 2 things to be true. 1) short term TFs when it comes to cycles must complete itself or reach a point of reversal. Call me Crazy but I like to think of short term TFs like they are short-term Moneys flowing in and out of the market. 2) I Think larger TFs have, what I call soft Supports and Resistance. Example if the daily resistance is at 1.20 and the 1.618 level on a Smaller TF is 1.220 it is possible that the shorter Tf will complete it 1.618 goal and then return back under the 1.20 Daily resistance and close there.

Just a side Note if you are using MA you in fact are using Multiple TFs ie a MA 20 on a i min chart is really 1 bar of a 20min TF.

Trend is only your friend if your both headed in the same direction.
MoneyInc

Originally Posted by Paul Chin

Dear rcopadilla,

I know why you are short, so am I. Maybe we'll both be "short squeezed", I'm not very concerned about that though.

Regarding the rising support cloud, it has a significance. Imagine you are looking at an hourly chart with a moving average, it is rising with price above the MA. It is bullish. Then you look at the 4 hourly chart with the MA of the same setting, you see price is below the MA, do you conclude that it is bullish and you want to be long? But supposed you only consider the hourly chart, will you want to be long? I don't think your trading methodology is based on this, but you should get my point.

One simple rule to Multiple Time Frame analysis is that: The Larger TimeFrame will OVERRIDE the smaller TimeFrame, in cases of conflicts occuring. So for my clouds, all the timeframes appear in one, so which cloud do you think I will listen to?

It doesn't matter if my analysis is right most of the time. People choose not to believe that price is predictable for trading purposes. The moment my views are wrong, posters will be eager to step out to point it out. I do not believe the clouds to be right all the time either, but if it is going to be bullish, the cloud patterns will change to support this, and it takes time for it to materialize, and by then, I can simply switch mode to play long. Not a big problem at all...

For now, the clouds are bearish. Hope this clarifies.

French election news should lead to concerns over French debt this week, this could be the next leg down in EURUSD, though I feel the Fed might become a bit more dovish than it has been recently on weds because of concerns that recent unemployment strength has been more due to seasonality than has previously been thought. they probably feel the market needs some support as well.

like the short from 13245 on open, then from 13305 if it breaks up. target 13010 if we can get some decent downward movement before the FOMC conference on Wednesday, after which i expect recovery

good luck

Originally Posted by Paul Chin

Dear rcopadilla,

I know why you are short, so am I. Maybe we'll both be "short squeezed", I'm not very concerned about that though.

Regarding the rising support cloud, it has a significance. Imagine you are looking at an hourly chart with a moving average, it is rising with price above the MA. It is bullish. Then you look at the 4 hourly chart with the MA of the same setting, you see price is below the MA, do you conclude that it is bullish and you want to be long? But supposed you only consider the hourly chart, will you want to be long? I don't think your trading methodology is based on this, but you should get my point.

One simple rule to Multiple Time Frame analysis is that: The Larger TimeFrame will OVERRIDE the smaller TimeFrame, in cases of conflicts occuring. So for my clouds, all the timeframes appear in one, so which cloud do you think I will listen to?

It doesn't matter if my analysis is right most of the time. People choose not to believe that price is predictable for trading purposes. The moment my views are wrong, posters will be eager to step out to point it out. I do not believe the clouds to be right all the time either, but if it is going to be bullish, the cloud patterns will change to support this, and it takes time for it to materialize, and by then, I can simply switch mode to play long. Not a big problem at all...

For now, the clouds are bearish. Hope this clarifies.

Any upmove at this point will be short-lived.
I use multiple timeframes to come up with a gameplan. While the 30min and 1hour are good, sometimes I have to go to the 2H, 3H, 4H,6H and 8H to get some consensus. The charts on the various timeframes are all pretty much at resistance and are overbought so making a short call is easy. The 8Hour however is not that overbought, so it is probable that more upside is in store after a brief consolidation to reset the technicals.

has dropped to 1.31814.

Originally Posted by rcopadilla

has dropped to 1.31814.

Be careful, gaps can go both ways. On the other hand. I just like to say that anytime the market goes against my trade im getting squeezed!

and faster timeframes have been hit. Because of the bigger than normal red bars, wait for at least the tagging of the 1hour lower bands (1.3132 and rising) before looking for a reversal setup.

Wow,,,,Dude your indicator is simplisticly-Genius. I had to look at it a little closer and " wow sure genius my man... I Named my Indicator AIM Which stands for Alsbrooks Ichimoku Model.....
Paul, you now see what I see.....

Originally Posted by rcopadilla

has dropped to 1.31814.

Has slowly rise back to 1.3199

Originally Posted by Sim3

Has slowly rise back to 1.3199

The retracement was expected to be shallow but not this shallow. This retracement of the quick drop has reached 50%. The downside action should resume.

Keep in mind the the intermediate term bias is to the upside. This down action is countertrend. After strong support is hit, expect the uptrend to resume to higher highs.