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I will introduce a new EUR/USD thread. I will frequently post my EUR/USD chart analysis

 

I hope some people will participate and also post their EUR/USD analysis here.

 

Let's share our knowledge!

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EUR/USD Market Recap 08.06.12

 

EUR/USD found resistance at January's low 2012 (orange line) and the 61.80 % fib retracement of the recent swing (EUR/USD Market Recap 07.06.12). Yesterday's daily candle could not close above the 20 SMA and closed in the price range of the prior daily candle (false breakout). Furthermore, market formed a Doji bar or evening star pattern, which led to a sharp drop in price in today's Asian and European session.

 

 

On the hourly chart we see that the sharp price drop started at 1 a.m. GMT ,right after yesterday's daily doji bar closed. EUR/USD got initially pushed down by the 10 SMA and 20 SMA. The price drop at 1 a.m. triggered the bear flag (blue circle) and market moved to the 100 % fib extension (A-B at C ) and formed the second bear flag (D) at the green trend line and the 100 % fib extension (also 61.80 % fib retracement). In the following, market broke put of the bear flag and resumed it's down trend to the weekly pivot point. (Market respected the resistance in form of a bear, which means that market could not sufficiently bounce back from support-bearish signal). Recently, market respected (touched) the hourly 10 SMA (green circle) at 3 p.m. and broke through it with the next hourly candle. The 4-hour candle closing at 4 p.m. also looks like a doji (support at the weekly pivot).

 

 

On the 5 min chart we see the different bear flags (circled). After EUR/USD broke out of the first bear flag (blue circle) market went to the 161,80 % fib extension (1-2 at 3) where market formed the second bear flag (red circle). EUR/USD broke out of the bear flag and went to the 100 % fib extension (5-6 at 7). Market found support at the weekly pivot (slightly penetrated but no confirmation, stop fishing below the low of June 6th-blue line) where it formed a kind of ending diagonal ((8-impulsive,9-correction,abcde-ending diagonal). The correction high (9-green line) is the initial target after the ending diagonal terminated, which market reached quickly (directional move). Recently, EUR/USD found resistance at the daily S2 (1.2492-not shown), the prior consolidation (red circle) and particularily the 61.80 % fib retracement (5-e-not shown) at 1.2493.

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EUR/USD Market Recap 11.06.12

 

Market gapped up to 1.2624, which is the resistance zone of the 61.80 % fib retracement and the low of January 2012 (orange line) (EUR/USD Market Recap 07.06.12). Market moved above this resistance (second test) but could not overcome the monthly pivot point at 1.2661. From there, market bounced back and in the following EUR/USD closed the gap from today. On the 4 hour chart we see that the 4-hour candle closing at 12 a.m. GMT respected (closed at) the weekly pivot. Initially after the 4 hour candle closed market breached the weekly pivot point and EUR/USD formed a typical 3-wave consolidation pattern (5 min chart) below the weekly pivot before market resumed its down trend to close today's gap.

 

On the 1-hour chart we see that EUR/USD also closed at (respected) the daily pivot with the 3 p.m. candle before market initially breached the daily pivot point in the beginning of the next hourly candle.

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daily-eurusd9.JPG.4b2b6c619f8e26c507e7927f2a16ecbd.JPG

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EUR/USD Market Recap 12.06.12

 

 

In the Asian session, the Euro found support at the weekly S1 and market formed a kind of doji/ pin bar (reversal candle) on the hourly chart (Yesterday's low-blue line). From there, the Euro moved up to the 20 SMA (hourly) where the euro found some resistance (5 a.m.) (1) before market moved above the 20 SMA up to the daily pivot point at 1.2522 (2). The Euro reversed at the daily pivot point and market targeted the recent hourly low at 7 a.m. to clear some stops (3) (no breakout confirmation of the hourly low on 5 min chart) before the euro moved up again and penetrated the daily pivot point (4). However, we see on the 5 min chart (B) that market never confirmed a break of the daily pivot point (no close above the breakout candle). Market rolled over at the daily pivot point and targeted yesterday's daily low. Yesterday's bearish daily candle made a retest of this low very likely (bearish sentiment) and many stop and limit orders are expected to be below yesterday's low. Market cleared these orders and bounced back and closed again at/above the weekly S1 on the hourly chart (first breakout is often a false breakout). On the 5 min chart (below) we also see that the breach of the weekly S1 and yesterday's low did not get confirmed. The 5 min candle at 3:05 p.m. closed at the weekly S1 (respected it) and the following breakout candle penetrated this support level, however, there was no suceeeding candle which closed below the range of the breakout candle. Moreover, market bounced back at the 100 % fib extension from C-D at E.

Today's price action in the European session might be seen as a Head & Shoulder (ABC) with the green line as its neckline (5 min chart). Market formed a nice 3 wave consolidation pattern at the neckline (visible on the 1 min chart-bear flag) just prior to the breakout (D)

 

On the 5 min chart we see that the Euro bounced back after the unconfirmed breach of the weekly S1 and yesterday's low (blue line) (F), moved up to the 20 SMA (3:45 p.m.) where market consolidated before the Euro went up further and formed a bullish consolidation (bull flag). The green neckline seemed to provide some resistance. The bull flag got triggered, supported by the rising 20 SMA on the 5 min chart and market moved up again.

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5min-eurusd26.JPG.a7ed6f3a532d64d37997659a175be6e1.JPG

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EUR/USD Market Recap 13.06.12

 

1h-EurUsd125.JPG.acfce0d4068550ab891d5cced6ecf935.JPG

 

 

Today in the beginning of the European session the Euro moved up to the 100 % fib extension (1-2 at 3) and daily R1 at 1.2548. The Euro struggled with this resistance level although EUR/USD moved up close to the weekly pivot point (1:35 p.m. GMT, 4). However, EUR/USD failed to close above this resistance zone (1.2548) on the hourly basis so that market moved lower (1:35 p.m.) to find some support at the rising hourly 10 SMA (red line-5). From there, the Euro strongly moved up above the prior resistance zone at 1.2548 (second test) and market was able to close above the weekly pivot on the hourly (second test) and 4-hourly basis (candle close at 4 p.m.). The hourly candle (3-4 p.m.) approximately closed at (respected) the 61.80 % retracement and daily R2, which in the following got broken with the beginning of the next hourly candle (4-5 p.m.) and the Euro moved up to the 100 % fib extension at 1.2603 (6).

 

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On the 5 min chart we see that the Euro very often reacted at the 61.80 % fib retracement marked with the 0 on the 5 min chart and also at the 100 % fib extension market with the 1 on the 5 min chart (important fibonacci levels). At the beginning of the London trading session at 9 a.m. the Euro made a abc retracement before market moved up to the 100 % fib extension at 1.2554. In the following market formed a typical 3-wave consolidation pattern/ butterfly (circled). After the termination of the consolidation the Euro reached the typical butterfly target (127 % fib extension-1-0 at 0) before EUR/USD reversed and took out the low of the prior consolidation (1.2526), which is also typical for a butterfly pattern. The Euro found support at the 10 SMA on the hourly Chart (2-3 p.m.) and formed a kind of ending diagonal on the 5 min chart (ED). In the following, the Euro strongly moved up to the 100 % fib extension, where market consolidated.

 

Unfortunately,I am not sure how to use larger images

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EUR/USD Market Recap 14.06.12

 

Yesterday, the Euro found resistance at the 100 % fib extension (1.2603) (4) and bounced back to today's daily pivot point (1.2552) and the 61.80 % fib retracement (6). From there, the Euro form a larger consolidation around the weekly pivot at 1.2564 on the hourly chart. During this consolidation the Euro did not confirm a break below the weekly pivot point on the hourly chart after yesterday's confirmed upward penetration of this level (4 p.m-yesterday) . The recent consolidation pattern at yesterday's high (5) and the low of August 2010 (orange line/weekly chart-last chart) seem to have capped the market to the upside recently (8). Since the break below orange line on Monday the Euro struggled to confirm an upward break through this level again on the hourly chart. However, the 4 p.m. hourly candle confirmed the upward breach of the orange line on the hourly chart after market paused at the 61.80 % fib extension (3-4 at 7). But in general, the price action on the daily chart might be more important in analysing the price behaviour around weekly support/resistance.

 

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On the 5 min chart (below) we see that the Euro retested the daily pivot point at about 10 a.m. GMT but market could hold at support. The initial breakout candle at 9:55 a.m.did not get confirmed on the 5 min chart. The Euro consolidated around the daily pivot point (B) and moved up again (no confirmed breach of the daily pivot point). The daily pivot and the recent consolidation (B) at this price level held the market again at 1:10 p.m © and the Euro moved up again. At 2:40 p.m. the Euro bounced strongly back from the weekly pivot point and the 61.80 % fib retracement (D) after the Euro formed a higher low (1:10 p.m.) and higher high (1:55 p.m.) on the 5 min chart. The Euro consolidated at the 61.80 % fib extension before market resumed its uptrend and breached the recent high (blue line-stop clearing target) but the Euro found resistance at the 61.80 % fib extension on the 5 min chart (G) (first breakout often false one) and market price closed below the blue line (recent high) on the hourly (4 p.m.). The Euro found some temporarily support at the price level of the prior consolidation (H) and market formed a bear flag before market went lower (not shown).

 

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Chart Analysis Forex (EUR/USD)

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EUR/USD Market Recap 15.06.12

 

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On the 4 hour and 1 hour chart we see that the Euro very often closed at the low of January 2012 at 1.2624 (pink line), which coincides with the daily high of the 7th of June and the gap opening on Monday. Particularly on the 4 hour chart we see that every candle today closed at this important level. On the hourly chart we see that the Euro respected the 61.80 % fib extension at 5 a.m. (recent high) and price moved lower from there. On the 1 hour and 5 min chart (below) we see a nice Head & Shoulder formation. At 11:15 a.m. the Euro breached the neckline (brown line) (A) but market could not confirm this breakout (first test). The second break of the neckline occurred at 12:45 p.m. and market moved to the 100 % fib extension (B). EUR/USD breached the daily pivot point, however, the pivot point, the 4-hour 10 SMA and trend line (4-hour chart) supported the market. The Euro managed to close above the neckline on the hourly chart at 2 p.m. after a choppy price between the neckline and the weekly pivot.

 

On the 5 min chart (below) we again see the importance of the pink line and its changing role from resistance to support vice versa. The Euro formed a bull flag on the 5 min chart and in the following closed above the pink line after market already regained the neckline with the hourly close at 2 p.m.. The Euro bounced back from the pink line at 5:25 p.m. (now support) and cleared the stops above the recent high ©. However, market could not close above the recent high on the 5 min chart at the first breakout (only stop fishing) and the Euro fell back again.

 

5min-eurusd30.thumb.JPG.efe5d349fabb134a8fc03f62effe0c7a.JPG

 

Chart Analysis Forex (EUR/USD)

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EUR/USD Market Recap 18.06.12

 

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Today, the Euro gapped up to 1.2748 and from there EUR/USD started to move down and completely retraced the gap and the Euro even fell much further.

The 2 a.m hourly candle found support at the 10 SMA (red line) and the Euro started to retrace up to 1.2725 supported by the rising hourly 10 SMA . After the end of the upward retracement the Euro resumed its downtrend and closed today's gap.

The 8 a.m. hourly candle respected (touched) the hourly 20 SMA (purple line) after the Euro consolidated between the 20 SMA and 200 SMA on the 5 min chart, and the Euro initially broke through the 20 SMA with the beginning of the new hourly candle at 9 a.m. (London open-green circle on 5 min chart). The Euro found some temporary support at the pink line (low of January) and formed an abc-retracement up to the monthly pivot point. From there, the Euro bounced back and penetrated the pink line again but market could not confirm the breakout on the 5 min chart . However, the Euro made a hourly close below the daily and particulary weekly pivot point (11 a.m.) and confirmed the break below the daily and weekly pivots on the 5 min chart. The following retracement went up to these pivots and the 20 SMA on the 5 min chart which now all acted as resistance (red circle). EUR/USD bounced back from this resitance, which also coincided with a retest of the gap opening (brown line) and the Euro finally breached the low of January 2012 (pink line). The Euro found some support under the low of Friday (initial target reached = stop clearing-The first breakout is very often not confirmed). Moreover, the orange line highlights the low from August 2010, which acted as support . Market retraced up from there (abc-retracement) but as market resumed its downtrend at 3:30 p.m.the Euro breached the orange line and confirmed the break on the 5 min chart so that the orange line became resistance on the 5 min chart and market's upward correction terminated at this resitance at 5:50 p.m..The daily S2, the 200 hourly SMA , the 61.80 % fib retracement of the recent daily upswing and the 100 % fib extension (1-2 at 3) give some support around 1.2550-1.2565.

 

Chart Analysis Forex (EUR/USD)

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Based on the information you provided in post # 8, do you have an opinion on what will play out today???

 

On my 4 hour chart I have the 50 SMA holding, a Doji ( in the shaded gray area ) and the stoch coming out of oversold ( also in shaded grey area ).

 

So, perhaps a re test of 12700 ?

eu4hr.thumb.gif.7814123b7c68048b30703b298dd64d2a.gif

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Based on the information you provided in post # 8, do you have an opinion on what will play out today???

 

On my 4 hour chart I have the 50 SMA holding, a Doji ( in the shaded gray area ) and the stoch coming out of oversold ( also in shaded grey area ).

 

So, perhaps a re test of 12700 ?

 

 

For me the resistance at 1.2624 (low of January, gap from last week..) is an important resistance. As long as the Euro does not confirm a break above I am bearish, and current price action could be seen as a consolidation after yesterdays strong downward candle. A retest of Yesterday's low (strong bearish candle) is also not unlikely. The recent down swing found support at the 200 SMA on the hourly.

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Based on the information you provided in post # 8, do you have an opinion on what will play out today???

 

On my 4 hour chart I have the 50 SMA holding, a Doji ( in the shaded gray area ) and the stoch coming out of oversold ( also in shaded grey area ).

 

So, perhaps a re test of 12700 ?

---------------------------------------------------------------------------------------------------------------------------------------

 

Target hit. 12700.

eu4hr.thumb.gif.c122ef8cbb14036ff3f3ce357586b3ca.gif

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EUR/USD Market Recap 19.06.12

 

nice call mysticforex.

 

Short version:

Market formed a bull flag at the 1.2624 resistance level and broke through this major level. The upward break through the key resistance level led to a strong bullish momentum

 

1h-EurUsd129.JPG.df9c1a595f23a8b82243470fc82e10cd.JPG

 

Longer version

 

On the 1 hour chart we see the changing role of the key level at 1.2588 (August 2010 low-orange line). Yesterday in the US session the Euro closed below this level at 3 p.m. GMT and in the following the Euro found resistance at the orange line. However, the Euro got supported by the hourly 200 SMA (black line) and the EUR/USD move above the orange line again in today's overnight session. Now, the orange line acted at support (prior resistance becomes support) and the Euro did not close below this level on an hourly basis. EUR/USD penetrated the orange line between 9 a.m. -10 a.m. but market bounced back again from the 200 SMA (yesterday's consolidation also provided some support at this price level) and closed finally above the key support.on the hourly chart. From there, the Euro moved up to the next key level at 1.2624 (pink line-January low). The Euro could not overcome this level for a while, however, EUR/USD also did not significantly bounced back from this resistance. The resistance got further strengthed due to the daily pivot at 1.2629. Market formed a bull flag on the hourly chart and the Euro broke through resistance (pink line) with the beginning of the 2 p.m. hourly candle after market repeatedly slightly penetrated this level during the three hour consolidation (bull flag-eroded resistance over time). Moreover, the bull flag terminated exactly at the 100 % time projection of the prior upswing (A-B at B, 5 min chart below).

After the break of the strong resistance (pink line) market gained strong bullish momentum.

The 2 p.m. hourly candle closed above the weekly pivot, the 3 p.m. hourly candle above the monthly pivot and the 4-hour candle closing at 4 p.m. closed (respected) at the 61.80 % fib retracement and market breached the 61.80 % fib retracement initially after the 4 hour candle closed (red circle on hourly chart).

 

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On the 5 min chart we see that the Euro initially moved to the 61.80 % fib extension (A-B at C) after the breach of the pink line. The Euro found some resistance there and bounced back to find support at the rising 10 SMA (red line) on the 5 min chart and the Euro got repeatedly pushed up after touching the rising 10 SMA (strong bullish momentum).

The 5 min chart also highlights the changing role (support/resistance) of the orange line. EUR/USD repeatedly reacted at this level (1.2588).

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EUR/USD Market Recap 20.06.12

 

1h-EurUsd130.JPG.cb0978f65cf6bb64d3c2f7eacf7097e1.JPG

 

The daily high of the 11th of June at 1.2669 is another key level (blue line). Today, the Euro found some support at this level in the Asian and beginning of the European session (hourly chart above). The Euro traded in a tight range prior to the FOMC market release.

 

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On the 5 min chart (above) we see that market formed a kind of Head & Shoulder pattern (ABCDE). The break of the brown neckline got confirmed with the news release at 5:30 p.m. GMT. Just prior to the news release at 5:25 p.m. the Euro bounced back from the 100 % fib extension from C-D at E and market closed in the range of the preceding 5 min candle. After the news release the Euro (5 min candle-5:30) initially moved down to the H & S target at around 1.2665 (B-D at F - blue circle, F= neckline break), also 161% fib extension C-D at E. From there market bounced back before the Euro resumed its downtrend to the weekly pivot point where the Euro found strong support and moved up again. The Euro found some resistance at the brown neckline (touched-respeced it, red circle) before market finally broke the neckline to the upside with the beginning of the new hourly candle at 6 p.m.. The chance of a temporary continuation of the uptrend and a breach of the high of the 5 p.m. hourly candle got increased due to the 5 p.m. hourly rejection candle (long tail) and the hourly close at the neckline. The 6 p.m. hourly candle breached yesterday's high. The volatile market after the news release led to a clearing of the stops below and above today's "pre-new release" trading session, which is not untypical for a news release (stop fishing targets).

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EUR/USD Market Recap 21.06.12

 

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On the daily chart (above) we see that yesterday's daily candle formed a doji and market formed a kind of double Top. The Euro dropped in today's European and US session and currently market penetrates the daily trendline and the Euro is close to the 20 SMA (purple line). On the 4-hour chart (above) we see that the Euro touched (respected) the daily trendline (red) with the closing of the 4-hour candle at 4 p.m.. The Euro initially dropped further with the beginning of the new 4-hour candle starting at 4 p.m. (Timing) and the Euro penetrated the low of the 18th of June (green line).

 

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On the hourly chart (above) we see that the Euro found resistance at the 61.80 % fib retracement (1) yesterday in the US session. Today, the Euro found support at the monthly pivot point in the Asian session (2) and moved up to the 20 SMA (3) where the Euro bounced back. The Euro moved down and penetrated the monthly Pivot point at 8 p.m. whereby the breach of the recent low (grey line, (4)) did not get confirmed on the 5 min chart (stop fishing). From there, market moved up and finally penetrated the daily pivot point at 1.2691 (5), however, the Euro did not confirm the breach on the 5 min chart (no higher close of the succeeding candles above the range of the breakout candle at 12:20 p.m.) and market formed a strong one-hour rejection candle (long tail of the 12 a.m. candle). In the following, the Euro dropped down strongly. The 2 p.m. hourly candle respected (touched) the support level at 1.2624 (pink line-Januarly low, orange circle) and market initially breached this level with the beginning of the 3 p.m. hourly candle. The same pattern occurred at the hourly 200 SMA and the daily trend line (red line). Market touched this support level and immediately after the close of the hourly and 4-hour candle at 4 p.m. (Timing) the Euro breached this support level and resumed its downward trend (black circle).

 

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The 5 min chart (above) shows the failed breakout confirmation at the grey line (A) and the daily pivot point (B). The red circle illustrates typical price behaviour around support and resistance. The 1:35 p.m. candle breached the monthly pivot but could not close below, however, the second breach got confirmed on the 5 min chart from the 2:05 p.m. candle. The Euro moved up again but market could not regain the prior support level (no confirmed close above the monthly pivot). The Euro also found resistance at the decreasing 10 SMA (red line), and the 5 min candle at 2:15 p.m. closed as a doji. The monthly pivot point now acted as resistance and price moved down. The green circle shows the bearish consolidation (bear flag) at the pink line (January low). The Euro breached this level at 3 p.m. initially after the hourly candle closed at this support level. The same price behaviour occurred at 4 p.m.. In a strong bearish or bullish environment market often close at key levels and after market respected these levels with the candle close these levels often get breached with the beginning of the new candle (either for a false or confirmed breakout-Timing). This price behaviour is visible on all time frames. The blue circle on the 5 min chart shows the retest of the orange line (low of August 2010) after this level got breached (confirmed). The 20 SMA also pushed the price further down (trend continuation).

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EUR/USD Market Recap 25.06.12

 

daily-eurusd11.JPG.641efd85a3750640ff069acb6862e469.JPG

 

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Last week the Euro formed a Double Top whereby the second top is a doji on the daily chart. The EUR/USD initially moved down and reached the price target of the Double Top on thursday (EUR/USD Market Recap 21.06.12), which is the breach of the low between the two tops at 1.2557 (low of June 18th-blue line). The Euro found temporary support at the daily 20 SMA after market breached the blue line. The Euro is currently close to the 61.80 % fib retracement (1.2464) of the recent upswing (daily chart).

 

On the 4-hour chart we see that a kind of bearish flag was formed. Today market triggered the bear flag and the Euro resumed its downtrend. The 10 SMA (red line) on the 4-hour and 1-hour chart pushed the Euro down. The Euro found some support at the 61.80 % fib extension from the recent swing down (A-B at C-see 4 hour chart).

 

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The blue circles show some bear and bull flags on the 5 min chart. The fib extension levels 61.80 % (initial target), usually 100 % and sometimes even 161 % (strong trend) are typical swing projection targets e.g. of the bull and bear flags. The swing down after the first bear flag moved to the 161 % fib extension (breach of friday's low-stop triggering). The swing down after the second bear flag only moved to the inital 61.80 % target and the swing up after the small bull flag reached the 100 % fib extension. The recent upswing on the 5 min chart found resistance at the 200 SMA and the 100 % fib extension.

 

 

The main question will be whether the Euro can make some larger retracements from the recent 61.80 fib extension on the 4-hour chart or whether the Euro is forming a new bear flag on the hourly/4-hour chart before resuming the down trend to the 100 % fib extension. The hourly 20 SMA and the 200 SMA on the 5 min chart currently provide some resistance.

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EUR/USD Market Recap 25.06.12

 

Last week the Euro formed a Double Top whereby the second top is a doji on the daily chart. The EUR/USD initially moved down and reached the price target of the Double Top on thursday (EUR/USD Market Recap 21.06.12), which is the breach of the low between the two tops at 1.2557 (low of June 18th-blue line). The Euro found temporary support at the daily 20 SMA after market breached the blue line. The Euro is currently close to the 61.80 % fib retracement (1.2464) of the recent upswing (daily chart).

 

On the 4-hour chart we see that a kind of bearish flag was formed. Today market triggered the bear flag and the Euro resumed its downtrend. The 10 SMA (red line) on the 4-hour and 1-hour chart pushed the Euro down. The Euro found some support at the 61.80 % fib extension from the recent swing down (A-B at C-see 4 hour chart).

 

The blue circles show some bear and bull flags on the 5 min chart. The fib extension levels 61.80 % (initial target), usually 100 % and sometimes even 161 % (strong trend) are typical swing projection targets e.g. of the bull and bear flags. The swing down after the first bear flag moved to the 161 % fib extension (breach of friday's low-stop triggering). The swing down after the second bear flag only moved to the inital 61.80 % target and the swing up after the small bull flag reached the 100 % fib extension. The recent upswing on the 5 min chart found resistance at the 200 SMA and the 100 % fib extension.

 

The main question will be whether the Euro can make some larger retracements from the recent 61.80 fib extension on the 4-hour chart or whether the Euro is forming a new bear flag on the hourly/4-hour chart before resuming the down trend to the 100 % fib extension. The hourly 20 SMA and the 200 SMA on the 5 min chart currently provide some resistance.

 

I get that a lot of this is chart language but I find it very indecisive and confusing. It seems that the reader would not know what to do until after it is done doing what it was going to do and then he can marvel at what it did and feel that he knew it was going to do what it did, but he wouldn't have made a penny since he was undecided about what it was going to do until after it did what it was going to do. I do find the highlighted text particularly funny.

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The way I am looking at the pair, the monthly timeframe shows that Eur/usd will drop to at least 1.1677 due to channel movement. After that trade will depend on wether the pair will break the channel or bounce up.

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I get that a lot of this is chart language but I find it very indecisive and confusing. It seems that the reader would not know what to do until after it is done doing what it was going to do and then he can marvel at what it did and feel that he knew it was going to do what it did, but he wouldn't have made a penny since he was undecided about what it was going to do until after it did what it was going to do. I do find the highlighted text particularly funny.

 

Thanks for your feedback. I got your point and I think it is a good point. Nothing is for sure and you always have to live with uncertainty. The trader only can try to find high-probability setups with acceptable risk in relation to the price target. The point is that after years of trading I am convinced that these kinds of charting tools/patterns are the most effective. For trading purpose I think it is important to understand these basic charting tools. But more important is to put everything in context. The charting tools give you an understanding on what levels market is likely to react. The way market is reacting often depends on the price action at these levels (context-trend/consolidation, confirmation/non-confirmation of a break, candle close at or near a level at an important timing point (4-hour,hourly close)).

So the first step is to know the important price levels and the second to watch price there (e.g. confirmation of a breach or rejection, fake breakout - only stop fishing).

 

If market is close to a key level (first time) a bounce from this level is likely. If market returns quickly to this level (second test) or market even consolidates at the level (first test-bear flag) then a break of this level is more likely particularly on an important timing point (either fake breakout-stop fishing or true breakout- confirmation). Consolidations often take at least the same time as the last related impulsive swing. Very often market only goes for stop fishing (recent highs/lows, first test) and market does not confirm the breach (breakout candle/stop triggering candle does not get confirmed). A trader should also understand the changing role of support/resistance levels after a confirmed break of a level.

Moreover, a trader should use these charting tools to find confluence levels where more charting signals agree on a specific level and watch price around it, which led to higher probability in trading. If a trader understands these pattern and tools then IMO a trader can better understand price behaviour and is more likely to understand what market action is about and the underlying implications.

 

So in general, a trader should not take a signal (SMA) on its own but should consider the context and also look for confluence levels (key level-first touch). An SMA is stronger in a trend and with a rising/declining shape and at the first touch. However, other tools also should agree on the same levels. The way price reacts on the SMA is also important. If market after bouncing from the SMA only reaches the 61.80 % fib extension of the recent swing and quickly turns back to the SMA then the support/resistance of the SMA for a further bounce might be in question.

 

The recap should help people to get a feeling for the use of the charting tools and the behaviour of price movements. The recap should explain the most influencing chart technical factors (IMO) on the price movements to give people an idea how and why market reacted in a specific way.

 

However, in the recap it is in hindsight and sometimes the recap might highlight the (IMO) most important chart technical reason for a price movement but in real time this would not be enough to qualify for a high-probability trade.

However, you will see that many pattern I highlight will repeat over and over. If someone understands these pattern/ charting tools and the likely implication for future price movements and price targets as well as the rejecting of the pattern then someone can tie everything together and search for high-probability trades (key levels/confluence levels, specific price patterns).

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EUR/USD Market Recap 27.06.12

Everyone is welcome to post some analysis, trade setups, forecasts or thoughts about the EUR/USD so that this thread can get more interactive.

 

1h-EurUsd134.JPG.a9bb4a798b27b3ff5500745fc91707d9.JPG

 

5min-eurusd38.thumb.JPG.82a664325c5b6ed210e42c370061ddd7.JPG

 

Yesterday, the Euro found support at 1.2445 and formed a pin bar on the hourly chart. The bullish pin bar is a reversal pattern and it shows a strong demand at its level of creation. Hence, market was supported at this level and the strong rally back indicated a bullish rejection of the penetrated price level.The pin bar (bullish sign) led to some follow through and the Euro moved up to the 1.2500 zone. However, on the hourly and 5 min chart we see a kind of Head and Shoulder pattern. The brown neckline of the H&S and the supporting green trendline got broken at 1:15 p.m. GMT (confirmed on the 5 min chart). As often, market retested the recent support which now became resistance (neckline, green line) at 1:35 p.m. (small red circle). However, the neckline/green trendline held the market, which also coincided with the 5 min 20 SMA and 61.80 % fib retracement of the recent swing down. The Euro initially moved down after the retest but market did a second retest of the brown neckline (green circle) after market got rejected at the 61.80 % fib extension and weekly S1 at 2:15 p.m. (pink circle). If market strongly bounce back from the 61.80 % fib extension (no initial penetration or consolidation at this level then a temporary rejection of the current trend on this time frame is likely (either reversal or larger consolidation) and market moves to the recent support/ resistance. However, the Euro could not move above the neckline (green circle) and market resumed its downtrend and finally the Euro reached the H&S target (100 % fib extension from the largest swing of the H&S moved to the breach of the neckline) (blue cirlce). The H&S target also coincided with the March 2009 support level and the 100 % fib extension from the recent swing down. The Euro moved up from there but market penetrated this support level with the beginning of the new 4-hour candle at 4 p.m. after the prior hourly and 4-hour candle already touched (respected) the monthly low of March 2009. However, market only temorary breached this level (brown circle) and the Euro found support at the fib confluence level at about1.2447 and the daily S1. The Euro hold at the two 100 % fib extension and the 61.80 % fib extension (rejection) and market closed again above/at the March 2009 support level (rejection). The Euro resumed its uptrend after the formation of two bull flags (first one at the 5 min 20-SMA resistance).

The price zone of the consolidation at 1 a.m. and at 6 a.m. (on the left of the 5 min chart) gave some support/resistance to the market as the Euro reached this price zone again.

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I think anyplace is a decent place to get in short dependent on your risk tolerance. Throw away the charts. The euro is heading lower.

 

Sub 1.100. I don't know when, or for sure. There is no way to fix the mess in the short run

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I think you are right MM...eu leaders are too slow to act and things have been getting worse since this crisis started...I wouldn't be surprise to see 1.1 before end of 2013...

 

German FinMin spokesman denies earlier WSJ report that Germany ready to move sooner than expected on shared liability of EZ debt. EURUSD falls.

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