A-B-C-D Trade - page 63
You are missing trading opportunities:
- Free trading apps
- Over 8,000 signals for copying
- Economic news for exploring financial markets
Registration
Log in
You agree to website policy and terms of use
If you do not have an account, please register
Nov 10th EUR/USD
Let’s examine action on the 15-min chart
1) Fib Retracement Tool:
High = Nov 9th 12:30 1.3973 (Euro session)
Low = Nov 9th 08:15 1.3823 (Euro Session)
During Nov 10th Asian session, pair extended to 161.8.
2) Now let’s move the low
Fib Retracement Tool & Fibo Arcs Tool:
High = Nov 9th 1.3973
Low = Nov 10th 00:15 1.3736
2A) Bounced off the area of the 161.8 per #1 plot, and retraced 23.6%.
2B) Next, we saw it retrace to the 38.2% fib during the Nov 10th European session. This resistance was mentioned in detail on last post(s). Important was the fact that it was also the low from previous day’s Euro session
2C) Plot ABC downward from swings: 08:45/12:15/14:00. This produced a FE 161.8 of 1.3681, which was hit at 15:00.
This bottom was also caught with wider ABC of 12:30/00:15/08:45, which had its FE 61.8 at 1.3677.
2D) We threw in the fib arcs just to keep it fun. It happened to have caught Swing C during the Euro session. That was a quick probe above the 61.8 retrace fib. That was during the 14:00 candle which was a Gravestone Doji.
2E) Pair moved back up to the 23.6 fib of 1.3792 at time of this writing.
3) As mentioned, we thought support was too strong for pair to sustain below 1.3700 level. We also saw the 38.2 (1.3827)as significant resistance. Thus, activity basically remained in that range.
And finally, when we plot on the Daily chart from low of Sept 10th and high of Nov 4th, we arrive at the 38.2% retrace fib of 1.3655.
***
Ahead is G-20 meeting lasting 2 days in South Korea. Although currencies are of chief focus, no major news is anticipated. PIGS debt concern as re-emerged.
Keep your eyes on medium and high-impact data scheduled for Nov 12th. This includes the 14:55 release of USD University of Michigan Confidence, which has been forecasted for an uptick. This may be one reason traders are keeping a lid on any EUR/USD rise.
We are back with our comments, and will catch up with review of Nov 12th – 15th later
Meanwhile EUR/USD bounced off U.S. low of 1.3562 area during early Asian. Wide plot had bounce stop just short of the 38.2 fib of 1.3657. It is making a retrace toward the 38.2 of 1.3618.
Should 1.3657 be hurdled, we see 1.3667 resistance as nice spot for bounce trade short.
Retrace exit levels:
23.6 = 1.3641 for +26 gross pips
38.2 = 1.3625 for +42 gross pips
We’ll need to exit ahead of 09:30 GMT GBP CPI
Any breakout of Asian High analysis must consider this resistance.
As we get closer to the end of the Asian session, we see a 50% retrace thus far of the move up. Should pair continue down and break Asian low, regular extensions are:
138.2 = 1.3522
161.8 = 1.3500
PIGS on front page again. EU Finance Ministers meeting in Brussels will focus on Ireland.
The nation itself is reported to have enough money for about 6 months. However, there has been a run on their banks lately resulting in too much leverage.
A statement by Ireland is forthcoming today.
**** As we'll explain in more detail later, the problems in the banking sector is not new. With every severe recession, banks take a hit and many require bailouts as they write off bad loans. Doesn't mean we should like it.
Ireland's statement is due in about 90 minutes.
Currently, and after pullback, EUR/USD looking to test Asian session low. Also Yen may strengthen against Euro to test EUR/JPY session ow.
EUR/USD met first profit level at the regular 138.2 extension of 1.3522, as outlined. Next level is 161.8 of 1.3500.......but watch the Ireland statement time.
Corresponding pair was USD/JPY which made gains to its 138.2 regular extension of 83.46 (from European session high/low plot). This meant that EUR/JPY pulled in both directions, and remained above session low..
As usually, for more precision, plot ABC for FE levels. Currently 15-min chart swings of 14:30/15:00/15:15 resulted in FE 161.8 price 1.3515 just hit.
Ireland's statement that came in slightly after 17:00 GMT just reconfirmed that they are in discussions on possible assistance to their banking system. They have not formally applied for assistance. The IMF may be involved.
As mentioned, depositors have withdrawn funds from Irish banks in a show of concern and lack of confidence. Ireland, much like the U.S. and EU has gone through a real estate bubble (along with other asset bubbles).
During severe recessions and depression, banks take the hits and many require bailouts. A large percentage of banks fail. I believe that during the U.S. Great Depression, about 60% of the banks went under.
Today, we also heard from Austria. They stated that they are not in agreement with further assistance since Greece has not met its obligation. Spain and Portugal, which rounds out the PIGS nations, were also mentioned today.
The stock markets in major countries were down significantly today as well.
*****
EUR/USD just completed its FE 161.8 to 1.3470 at 17:30 GMT.
EUR/JPY broke out of the European session low, just prior to Ireland's statement, to extend to its 161.8 of 112.39 after announcement.
When you're not sure about fib plots, use session high/low. In this case, the EUR/JPY's European session.
***
Edit; To add - it cost countries like Ireland and Greece more to borrow. This is due to the spread between the German interest rate and their own widening due to debt concerns.
There will be additional comments on Ireland in about 45 minutes. The Wall Street Journal had reported earlier that a USD 100 Billion package is being discussed.
EUR/USD bottomed at 1.3448, which was the regular 161.8 extension of plot from Nov 12th 07:00 Asian low to Nov 12th 14:00 European high - on 1-Hour chart. The strong move down respected all plots en route, so no worries.
If we anlayze using the 15-min HAS candles, the closing of of the first opposite color candle (blue for up) was at price of 1.3489. The regular 161.8 extension price was 1.3469, base on plot with European high/low.
Can't get every pip, but that HAS can be used to trend last portion of lots. This was still an excellent extension. We can feel the pressure building for the breakout. We had to be ready with our best idea for the extension plot.
The original comment mentioned by us hours in advance, had the regular 161.8 at 1.3500, which is still a very good profit from Asian low of 1.3559.
Commodities took major hits in the last 24-hours. It was fueled in part by China's (and other countries) tightening action in raising interest rates. Speculation is that demand will lessen for oil and metals, including gold.
A good read is a book by Harry S. Dent Jr. entitled " The Great Depression Ahead" (and how to prosper in the crash). Mr. Dent is a respected economic forecaster that is not main stream. He utilizes demographic cycles.
Mr. Dent had correctly predicted the "largest boom in U.S. history" in his previous book. Amongst many other interesting forecasts, he projects that commodities run in 29 or 30-year cycles. Guess what? Based on that, we are due for a commodities collapse.
This is not the normal "the sky is falling book". We'll post excepts from this book from time to time. For now, we'll leave you with one: Most economists are flat line, not using cycles. This means they miss the extremes (booms and crashes).