A-B-C-D Trade - page 260
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The wide retrace fib plot (4-hour has easier view) for this GBP/USD SELL is
Low = 1.54222 High = 1.56491
50% = 1.55356 (current)
61.8% = 1.55089
78.6% = 1.54708 (cluster area along with Gann_SQ9 135-degree and wider fib plot based on October Low/High)
German/EU data at 09:00-10:00 should require exit of position beforehand.
USD weakened after China rate cut around 11:00.
This proved to be even more smart, as intervention occurred about 13:00, when it was announced that the U.S. and ECB, along with other central banks, agreed to provide more liquidity.
Spike against USD across all pairs.
The GBP/USD 08:30 candle retouched low 1.5530. The 08:45 period saw 38.2% pullback, and 09:30 retouched low again, probing to 1.5524.
If breakout filled about 1.5568, this trade was approximately +30 - 35 net pips.
is it china"s intervention ??
or joint of this 5 central banks ??
Hello James,
This was a coordinated effort by several central banks, to provide more liquidity to the European financial system. It was NOT done to increase or decrease currency exchange rates.
The European banks were reluctant to lend to each other, and had trouble getting money in USD denomination. Therefore, this action relaxed USD funding.
This action had been used before, and many critics view it as temporary. Europe still has "structural" problems in their financial arena.
Good web sites are fxstreet.com (very fast reporting) and bloomberg.com (more in depth articles).
Here's a plot we made on the 4-hour AUD/USD on Nov 29th. Inputs are:
Start Price = 1.07520 (Oct 27th 16:00 GMT)
Direction Up = False
Price (height) = 13500
Time (width) = 225
We tried all of the Gann ratios up to 360 for the height and added 2 zeros, before settling on 13500. The width is also a Gann ratio. See the Gann Is The Man thread in the indicator section for instructions.
We look for the diagonal red 1/1 angle line to act as support or resistance. In this case, it acted as resistance early and on Nov 13th and Nov 28th.
The breakout occurred during the Nov 29th 04:00 period. The next 08:00 candle period moved 125 pips and hit the blue 72 horizontal line. That is the 50% line of the GannBox.
After a small pullback, price made a double-top back at the 72 on Nov 30th 00:00.
Subsequent pullback was shortly followed by reaction to the coordinated central bank action. Price spiked up to the yellow 2/3rd. That area also met by red 1/1_angle2.
We repeat: traders don't always use the larger time-frame charts to trigger. They often use it to monitor S&R or major breakouts.
It takes a little work, trying the various Gann ratios, but is not like rocket science.
Earlier at 10:00, negative EU data (PPI) reported in, but largely non-event as the market awaited U.S. Change Non-Farm Payrolls (NFP).
13:30 saw release of NFP. One calendar service changed their forecast number at the last moment, but +120,000 seems to be the general consensus.
The 8.6% Unemployment rate however, was significantly better than the forecast number of 9%. This reinforced NFP and USD/equities rallied.
****
Attached is GBP/USD. We used the 30-min time-frame due to the 13:30 data release time. We have PSQ9 with both Moon and Mars at 45-degree intervals.
The Standard Deviation Channel (SDC) plot uses high-to-high of Nov 30th 15:00 and Dec 1st 15:00. We can see strict adherence as price stayed between mid and lower channels.
Fib channel aligned to SDC upper and lower channels.
The Fibo Fan plot is Low = Nov 13th 09:30 1.55248 and High = Dec 1st 15:00 1.57550.
Candle representing 13:30 period whipsawed a little but was contained by Moon and Mars as well as 50% fan ray. The 14:30 candle closed right at the SDC lower channel, prior to descent.
The 16:00 candle met support at the FC 131.4, which intersected the 88.6% fan ray.
Plot SDC on EUR/USd 30-min or 1-hour, using recent high-to-high. The outcome is more of a slope upward.
The FC alignment to SDC upper and lower channels result in support at FC 161.8. The 3/8th MML right there.
Looking at the Ichimoku, breach of cloud level coincided with breach of SDC lower channel, as marker for breakout to downside.
As a foot note, we don't want to go counter-trend on NFP. In both example pairs, there was a previous dip to a fib ratio level on Dec 1st. Trading a bounce there would contain a lot more risk.
NFP is probably the largest scheduled economic data event. Along with unexpected interest rate decisions, the market will usually have strong moves.
This chart details the application of the indicator SQ9(Price) on AUD/USD 1-hour. Start price = .96627 (Nov 23rd 15:00). Direction is up.
We also have the Standard Deviation Channel (SDC) plot: Nov 18th 12:00 and Nov 25th 15:00. Confirmation of the plot was price adherence to the mid-channel.
There was a double-bottom at the end of the week Nov 25th 09:00, which was also at the SDC mid-channel. BAJA bullish divergence there.
The new week of Nov 27th saw a gap up upon open, and was also a breakout of the SDC upper channel. It's O.K. if plot is fitted for this.
Aligned Fib Channel (FC) tool to SDC's lower and upper channel lines.
Price pulled back at each FC level of 31.4, 61.8, and 100.
We drew a pink horizontal line at the SQ9(Price) 360-degree level, which is usually significant since it represents a full cycle.
The first hit was Nov 29th 10:00, and had BAJA bearish divergence. This also intersected the FC 100 level.
The second hit was on Nov 30th 00:00, probing slightly above. This is a double-top.
Can use the 22.5-degree level just above the 360-degree, which is rounded up to 383-degree, for the stop-loss on these 2 SELL trades. Add spread and cushion.
Take-profit (TP) at SQ9 levels, but can be aided by horizontal retracement fib plot (not shown).
Low = Nov 29th 00:00 .98622 High = Nov 29th 10:00 1.00765
The first short got as far as the 38.2% fib, and is the same as the 293-degree.
This same retrace plot can also be used for the second short. Price fell to the 61.8% fib, which is the same as the 248-degree.
The subsequent spike up was due to the coordinated central bank action.
This example illustrates a breakout and counter-trend SELLs.
Multiple tools/plots used. Horizontal and diagonal S&R. Gann and Fibonacci ratios. Double-bottom and double-top. BAJA divergence.
Here's an Andrew's Pitchfork (APF) plot that could be seen easily.
Handle = Sept 1st 16:00 high 1.07626
Upper corner = Oct 27th 16:00 high 1.75720
Lower corner = Oct 4th 12:00 low .93864
Change name of APF to AL1, then insert AML_v1-1 indicator to get interior fibs for the pitchfork.
Horizontal fib plot:
Low = Aug 9th 00:00 .99257
High = Oct 27th 16:00 high 1.75720
Added Ichimoku and Heiken Ashi MA T3 new_alerts indicators. These 2 indicators allow viewer to see trend and more S&R.
Aligned Fib Channel (FC) to Upper_AL2 and upper fork.
Price reversed at the Upper_AL1 on Nov 23rd 16:00. This also is the 127.2 horizontal extension fib area (yellow). BAJA bullish divergence there.
The start of the new week of Nov 27th had a gap up that saw candles rise above the Heiken Ashi T3.
Due to the coordinated central bank action, price did not stall at the upper fork on Nov 30th. Price touched the FC 31.4 and the 50% horizontal fib on Dec 2nd 12:00.
If we look closer or zoom in, we can see the Nov 29th/30th double-top, as discussed in the previous post. The price retraced and found support at the blue Heiken Ashi T3 candles.