Yesterday at 12 a.m. GMT, EUR/USD broke through the triangle bottom but did not confirm the breakout of the low (green line, EUR/USD Market Update 17.05.12 -C-) and reversed. In the following, EUR/USD found resistance in the middle of the price zone of the triangle consolidation pattern (red circle) + the price zone of the tight consolidation and went south again till today at 7 a.m. GMT. From then, EUR/USD bounced from the support zone at about 1.2641 (EUR/USD Market Update 17.05.12 -A-). From there, EUR/USD went up till the Pivot point, consolidated there (Bull flag) and broke through it. Todays price development might be seen as inverted Head & Shoulder where the brown neckline got broken in the European session. Recently a second bull flag was formed and broke out to the upside.
On the 5 min chart, we see that the two consolidation pattern formed the typical 3-wave shape before the uptrend continued. EUR/USD found resistane at the 100 % fib extension from todays upmove from the support level at1.2641 to the neckline moved to point a at 1.2736, the 61.80 % fib extension (a-b at c) at 1.2736, daily R1 and the 127 % butterfly target (127 % from b-c at c). This confluence resistance zone hold the market (red circle) and EUR/USD went down to find some support at the middle of the price level of the prior consolidation pattern at 1.2710.
It is important to recognize when the breakout of the consolidation pattern occured (Breakout candle 1,2). Both breakouts took place at the beginning of a new 4-hour candle (12 a.m., 4 p.m. GMT). If you
observe the 4 hour chart then you also see that the 10 SMA and the 20 SMA provided resistance. EUR/USD respected these level but with the beginning of the new 4 hour candle (12 a.m. and 4 p.m. GMT) these resistance zones got weaker (already touched) and EUR/USD broke through it right at the beginning of the both new 4 hour candles (Timing). The second breakout (4.10 p.m. GMT) did not get confirmed as the succeeding 5 min candles did not close above the range of the breakout candle (no confirmation on the 5 min chart after the breakout of the consolidation - green line).
bullish engulfment on the daily? Holding long position for the weekend.
if get a close above 1.2761 on hourly TF then its pointing min 1.2856
but if we talk about the technical then this move should end at 1.2803 with the closing above 2761
i am taking the chance with my time/price relation techs which are pointing min 2856 with smaller retrace along the way
if get a close above 1.2761 on hourly TF then its pointing min 1.2856
but if we talk about the technical then this move should end at 1.2803 with the closing above 2761
i am taking the chance with my time/price relation techs which are pointing min 2856 with smaller retrace along the way
trade safe!
but if price halted at 1.2803 +/- 5 pips for an full hour then we can expect a healthy retrace towards 1.2665/75 other wise 1.2856 minimum
A lot of the people "buying" the euro in situations like today's are those who went short recently and are now cashing in their profits. When you find talk of a pair being "oversold" or "overbought" it means that there are heaps of speculative positions that have to unwind sometime, this unwinding forcing a significant retrace against the current before the underlying trend can resume.
Hi Robert - I would llike to trouble u with another question which I have just read from Zerohedge -
"EURO Soars on NO NEWS"
Nothing could be more appropriate than topping a week of surreal newsflow than what just happened with the EURUSD, which soared by 80 pips on absolutely non news, in what can be attributed to either some algo going ape---- and lifting every offer, a fat finger, or just the tried and true Bank of International Settlement stop hunt seeking to send correlated risk assets higher courtesy of a spark in upward momentum. Sadly today not even thiuch a higs glaring attempt to jump broad risk into the stratosphere is working. And ahead of a weekend where it is rumored Europe may reopen on Monday, we can't wait for the inevitable snapback.
Question - why would an algo trader take such a high risk to prop up the EURO knowing so well it would come down. Algo traders are PROFESSIONAL traders and I think it is suisidal to make such a move.
Hi Robert - I would llike to trouble u with another question which I have just read from Zerohedge -
"EURO Soars on NO NEWS"
Nothing could be more appropriate than topping a week of surreal newsflow than what just happened with the EURUSD, which soared by 80 pips on absolutely non news, in what can be attributed to either some algo going ape---- and lifting every offer, a fat finger, or just the tried and true Bank of International Settlement stop hunt seeking to send correlated risk assets higher courtesy of a spark in upward momentum. Sadly today not even thiuch a higs glaring attempt to jump broad risk into the stratosphere is working. And ahead of a weekend where it is rumored Europe may reopen on Monday, we can't wait for the inevitable snapback.
Question - why would an algo trader take such a high risk to prop up the EURO knowing so well it would come down. Algo traders are PROFESSIONAL traders and I think it is suisidal to make such a move.
Sorry to barge in here. But one always needs to take ZeroHedge with a large pinch of salt, mostly good for entertainment values. And there is no such a thing as "knowing so well it would come down". Last night I said on this board that there could be a squeeze next week. And this morning I posted a chart with FIB timezone showing that this Friday/next Monday with multiple confluence. Nothing is certain that it would always 'go down'. That's why the only certainty that price would fluctuate. I know on this forum very few or perhaps no people look at cycle studies so I hardly ever mentioned it. Markets move in cycles. In cycle terms, it's high time that Euro would move up. Perhaps a even sharper squeeze next week than I expected.
On a side note, look at the euro monthly chart with more than 10 years chart history to keep things in perspective. Admist all the hoo-rah of euro zone dramas, euro is doing pretty damn well. The sky is not falling in. And, if you believe that everyone should be shorting euro, then who is there to buy from you. The boat needs to be balanced on both sides to float. The short contracts are too heavy and the short trade is very crowded. Then it's more likely than not it would flip up hard and fast.
Sorry to barge in here. But one always needs to take ZeroHedge with a large pinch of salt, mostly good for entertainment values. And there is no such a thing as "knowing so well it would come down". Last night I said on this board that there could be a squeeze next week. And this morning I posted a chart with FIB timezone showing that this Friday/next Monday with multiple confluence. Nothing is certain that it would always 'go down'. That's why the only certainty that price would fluctuate. I know on this forum very few or perhaps no people look at cycle studies so I hardly ever mentioned it. Markets move in cycles. In cycle terms, it's high time that Euro would move up. Perhaps a even sharper squeeze next week than I expected.
On a side note, look at the euro monthly chart with more than 10 years chart history to keep things in perspective. Admist all the hoo-rah of euro zone dramas, euro is doing pretty damn well. The sky is not falling in. And, if you believe that everyone should be shorting euro, then who is there to buy from you. The boat needs to be balanced on both sides to float. The short contracts are too heavy and the short trade is very crowded. Then it's more likely than not it would flip up hard and fast.
Dear Franosh - thank you so much for your explanation. Really appreciate your sharing. Have a great weekend.
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Originally Posted by turmaz 
