Fibonacci Trading - Page 18

Gregory McLeod · #**256** (**permalink**) 04-09-2008, 06:29 PM

GBP/AUD rally from the March 8th low at 2.1096 to an interday high of 2.1311 terminated at the 50% Fibonacci resistance level of the 2.1506-21097 swing.

A break of the upward red counter-trend red line would open up the old low of 2.1096 and the 127% extension target of 2.0985.

The BOE rate decision hangs in the balance. A cut in their overnight lending rate from 5.25% to head-off a US like recession might be in the cards. This could widen the interest rate differential between the Sterling and Aussie.

This may lead to support further decline in the GBP/AUD.

Refer to the attached chart

Gregory McLeod · #**257** (**permalink**) 04-10-2008, 12:54 PM

The much anticipated Bank of England rate decision cut their overnight lending rate 25 basis points from 5.25% to 5.00%. This is what the market expected but there was some hope by some that rates would remain unchanged with a comment about inflation risks. Apparently, the risks to growth are currently greater than maintaining price stability.

What is significant from a Fibonacci standpoint is the failure of the GBP/USD to close above strong resistance at the 61.8% level of 1.9819 from the 1.9924-19650 downswing.

Initial target is the old low with stops above the 1.9848 level.

A break below 1.9650 opens up 1.9400 area

Gregory McLeod · #**258** (**permalink**) 04-11-2008, 09:58 AM

The failure of the ECB to cut rates is bullish as the rate differential between the US rates and Europe remain unchanged. Strong economic data coming out of France only removes fears that an appreciating Euro has slowed growth.

EUR/USD fell from a high of 1.5912 to trend line support at 1.5727. This represents the 38.2% retracement of the 15509-15912 swing.

The daily trend is up, so looking for opportunities to trade in the direction of the trend is the order of business. We usually like looking at the 4 hour or 60 minute chart to find these oportunities.

Hourly indicators are oversold and we could see a retest of the 15912 area before moving higher. Tight stops in the 1.5703 area should be set given the hightened even risk.

The G7 meeting in Washington DC could be a significant event risk as central bankers may be called upon to support the dollar. If this event becomes a non-event by the second day, then expect continuation of the previous weeks trend

Gregory McLeod · #**259** (**permalink**) 04-14-2008, 09:43 PM

AUD/CHF has rallied from the lows of .9180 only to be stopped cold by overhead supply found a the .618 Fibonacci resistance level of the .9337- 9177 swing.

Prices look to revisit this .9180. If we can close below that area, look to .9077 to be in play.

Only a close above the .9280 level would stop the bear attack.

Refer to the attached 60 minute chart.

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Gregory McLeod · #**260** (**permalink**) 04-15-2008, 04:52 PM

The Canadian Yen, CAD/JPY down trend struggles to get over last weeks high set on April 11th at 100.61.

Momentum seems to be slowing in at the 100.56 area which is also the 61.8% Fibonacci level of the 102.26-97.91 swing. There is also a daily trend line (red) near that area as well. See the attached chart.

Stops placed above the 102.26 high provides a low risk protection for Shorting CAD/JPY at the 100.56 area that first targets the 98.82 area and then the 97.16 area would create a 2:1 risk to reward ratio.
See the attached chart

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Ilya Spivak · #**261** (**permalink**) 04-22-2008, 04:30 PM

Last night the Fibonacci weekly article pointed to EURUSD hitting 1.60. At the time, spot was trading at 1.5902. The full article is available here:

http://www.dailyfx.com/story/special...836827750.html

Ilya

Ilya Spivak · #**262** (**permalink**) 04-22-2008, 04:56 PM

Our Fibonacci weekly has been looking for a NZDUSD rally for a couple of weeks now, with the pair consolidating at a confluence of trend line and Fib support. Today finally saw some upward momentum, which we think will take NZDUSD to test 0.8100.

The full article can be found here:

http://www.dailyfx.com/story/special...836827750.html

The Fibonacci weekly is published weekly on Tuesday morning on the DailyFX.com homepage.

twszatny · #**263** (**permalink**) 04-22-2008, 05:37 PM

Quote:

Originally Posted by Ilya Spivak

Our Fibonacci weekly has been looking for a NZDUSD for a couple of weeks now, with the pair consolidating at a confluence of trend line and Fib support. Today finally saw some upward momentum, which we think will take NZDUSD to test 0.8100.

The full article can be found here:

http://www.dailyfx.com/story/special...836827750.html

The Fibonacci weekly is published weekly on Tuesday morning on the DailyFX.com homepage.

What would be the Stop - Loss on this?

Tom

Ilya Spivak · #**264** (**permalink**) 04-22-2008, 08:17 PM

Quote:

Originally Posted by twszatny

What would be the Stop - Loss on this?

Tom

Hi Tom

For my own trading, I typically look for a daily close above/below a certain level to trigger a mental stop. If I had to put on a hard stop-loss order, I would probably look to place it around 0.7830-35 assuming an entry at 0.7900. This would lie a good distance below the trend line and give some breathing room while still maintaining favorable risk-reward parameters.

Ilya

Ilya Spivak · #**265** (**permalink**) 04-23-2008, 11:52 PM

Our weekly Fibonacci report was targeting AUDUSD to hit 0.9500 since the 03/24 issue, when spot was trading at 0.9119. Yesterday, our target was hit for a profit of 381 pips.

The most recent Fibonacci Weekly can be found here:

http://www.dailyfx.com/story/special...836827750.html

New reports are released every Tuesday morning.

Ilya

Ilya Spivak · #**266** (**permalink**) 04-24-2008, 12:00 AM

Our Fibonacci weekly saw USDCAD rise from 1.0065 to 1.0250. The pair has mounted a strong rally, currently trading at 1.0180 and 115 pips higher. 70 more pips remain until our target is hit.

The most recent Fibonacci Weekly can be found here:

http://www.dailyfx.com/story/special...836827750.html

New reports are released every Tuesday morning.

Ilya

Black.day · #**267** (**permalink**) 04-24-2008, 05:04 AM

Would it be correct to say that once price breaks through the previous swing low used as a base for Fibonacci projections then the new low and previous swing high failure is then taken as the low and high for the next retracement level projections?

Here are 2 charts to graphically demonstrate what I mean:-

Gregory McLeod · #**268** (**permalink**) 04-29-2008, 08:59 PM

Quote:

Originally Posted by Black.day

Would it be correct to say that once price breaks through the previous swing low used as a base for Fibonacci projections then the new low and previous swing high failure is then taken as the low and high for the next retracement level projections?

Here are 2 charts to graphically demonstrate what I mean:-

Yes. That would be correct. You could have even drawn your fibs in the direction of the impulse move to show Fibonacci Resistance as opposed to the support levels you have. Either way, you would have been clued in that the move is down not up.

Ilya Spivak · #**269** (**permalink**) 04-29-2008, 09:02 PM

The simple room of thumb I follow when drawing Fibonacci retracements is that it must contain a single move (either a rally or decline) from top to bottom. Keep in mind that Fibonaccis seek to set out levels that mark the degree of pull-back in a given dominant trend before that trend continues. Of course, any move can have sub-oscillations. Drawing Fibonaccis, as most technical analysis, is more of an art than an exact science.

Gregory McLeod · #**270** (**permalink**) 04-29-2008, 09:14 PM

Quote:

Originally Posted by Gregory McLeod

Yes. That would be correct. You could have even drawn your fibs in the direction of the impulse move to show Fibonacci Resistance as opposed to the support levels you have. Either way, you would have been clued in that the move is down not up.

Fibonacci should be drawn in both directions to explore the possibility that we may be wrong about price direction.

In your example, the GBPUSD failed to hold the support levels. When you draw Fibs from the other direction, you can see how price was rejected at the 78.6% Fibonacci Resistance level.

See the attached 30 minute chart: