Thursday, 30 December 2010

€$ & USDX cont

Result of the previous post is a failure to breach the reaction line and the thick magenta/mauve UMLP from the mod schiff fork (seen in the lower 2 charts). The USDX remains range bound between 81.20 on the upside and good support at 79.20


We are back on the same important RL as i talked about on Tuesday
We will now see if price has the energy to take out this resistance and go higher. A failure to take out this RL plus the magenta coloured UMLP
(from a Mod Schiff fork) in the bottom EuroUsd chart would consign us to the same range as we have seen previously If price breaks upward through the RL which now sits at 1.3300 this will mean the USDX down to the d-sloping CL at around 79.20.

Tuesday, 28 December 2010

€$ Tuesday 28th Dec......continued...again

Thats a big move....and it all started with a reaction line

€$ Tuesday 28th Dec......continued

Well that was quite a violent reaction from the RL! (as per previous post)
As you could see in the previous post i had a long position which was stopped out at B/E. Looking again you can see the RL to the right of price from a current fork that contains price and the confluence of both the long term RL at the top of the picture and the shorter term RL sloping down to the right of price was the catalyst (only visible in the 5 min chart due to glitch in the MQ4 custom indicator & object distortion). Price was very happy to trend sideways below the long term RL (but was unable to pass up through the R- line) until it reached the d-sloping RL
which triggered the fall. This is exactly the type of example of a reversal at ML's & RL's that i try to understand and look to see what signs were visible both in price action and the indicators to alert us to a possible reversal.

€$ Tuesday 28th Dec

We are back on the same RL (shown at the very top of the chart) that runs through the recent price history of EurUsd and we are now approaching form below and price will need to break through to continue going higher....this will be a good indication of the strength of this minor & current trend. A considerable amount of posts were dedicated to this particular RL which belongs to a significant fork in a much higher TF. Here is a link to see this in more detail when price was on its way down on Dec 17th. I suggest an initial failure at this line today but think we may see the Euro higher in the following weeks before the USD resumes its ascent in the DX chart. You can also see the ascending reaction lines (bunched together closely at 45°) which have carried price higher. From my observation the angle of any RL is often critical regarding its effectiveness and the strength of reaction that follows.
Please remember that the chart shown here contains a reaction line grid and many other RL's ( all drawn automatically by an MQ4 custom indicator) and is only of use to me in 1 or 5 min TF. Above this time frame the chart is too congested by lines/objects BUT it is possible to have as complete a picture as is possible of price by having RL grids in multiple TF's.

Friday, 24 December 2010

Happy Xmas 2

Below EURCHF with possibly the most simple fork work i have drawn this year (as per the previous post)

Below a mix of different reaction line 'grid' templates showing recent activity. I suggest that the Euro is due for a rise if it can break through the CL in the last chart ( 60min) below & the USDX is struggling to break through resistance at 81.00- 8150 and is trending in cycles sideways ahead of a break out.

Wednesday, 22 December 2010

Happy Xmas

Nice rounded double-b formation at 1.3080 on EurUsd sees the market now trading higher. Personally i favour the upside in the near term although bearish over all for the €uro. Unless we see a breakout of considerable scale i will post again after Xmas & will also update/add to the pages under construction and will soon post a review of 2010 and my outlook for 2011 covering major futures and currency markets of significant interest to me and including the energy and prec metal markets - both of which have a potentially interesting outlook -viz-a- viz reaction line theory These are just two of many potential opportunities in the markets that we may see in 2011.

Here below is a trade setup from about 2pm today before the US data using a reaction line failure. Indicators are Macd 7-10-5 , Long B-Line Stoch 35-10-1 with short ribbons & RSI with a sensitive 2 period setting. 200 SMA & B- bands. The retouch on the underside of the RL provided the entry after price made heavy going at 1.3150-1.3156 and the confluence of the the thin grey UMLP & the RL. At that time we had a 'kiss reversal' off the B-line by the short stochastic ribbons (no penetration) plus in the 5 min TF a bearish pair of candles plus double tops formation and the RSI in the zone just under 90 in both 1 & 5 min TF & .50 Fib RT from 1.3180 to 1.3130. The initial stop was above the previous high at 1.3156 and the objective was the aqua blue LMLP at 1.3109 where there is/was support from a warning line previously shown to be effective.

And finally....EURCHF below...a shrewd opportunity or prelude to a disaster? There is a high probability of a small bounce of the LMLP ( even if it eventually goes lower) but could it be more?

Monday, 20 December 2010

€$ & USDX

OK, we proceed as discussed last week in Friday's post and others. USD is heading in the DX chart (below) to take out the 81.50 level and the ML's which have previously been tested and price failed-retraced and here we are again heading back-up. Notice there is no CL touch on the purple CL (this fork is all the more significant because of it's attitude/angle).
EurUsd has caught on two separate warning lines from two separate 'grids' and found support. We may see some upward movement having now tested 1.3100 for the first time but it should not be too long before we test this level again. A break over 1.3150 -ish would mean further meandering before a retest on 1.3100. What effect on sentiment the holiday period and reduced volume will have remains unknown and could provide either a surprise or a period of monotony.
For anyone wondering what on earth this blog/bloke is up to then please have a look at some of the methods i use to understand price... press here


Trade ended up a bit like a damp firework & stopped out on the big candle as b/e. I am still not sure how this will pan out but GBP looks weak.

Above is a classic example of how extending the RL beyond the upper or lower MLP is just as effective as when price is in the fork. I have found price can be effected by long gone RL's/forks.

EURGBP ( +Eur -GBP/ stop .8450)


Friday, 17 December 2010

€$ & USDX


Beautiful 'retouch' on our RL and then down to the aqua blue ML

And here is a cluster of support at 1.3170 in another RL web template so i am just not sure how much further we will go especially in light of the reduced volume. Anyone of this bunch of RL's could 'catch' & hold price.

€$ Back on the RL

Heads-Up..... Could go down through 1.3220 and the DX back to 80.80 where resistance again supplied by a RL..see previous posts
PS: the RL grid in the second chart is of little use (due to object shift) when viewed in 60min TF but does show the RL from the weekly chart and the numerous tests that price has made on it recently.

Lastly, have you thought about GBPUSD recently? I rarely post my charts on this pair but the current EuroZone debt crisis has huge implications for the UK banking sector and the UK economy as #1 trading partner. The daily GBPUSD chart has an significant area of potential resistance (high TF RL's) approaching and it is my view that 2011 will see considerable pressure on Sterling as the conclusions of the far from unresolved Eurozone crisis become apparent. In depth Cable charts in multiple TF's to follow over the coming Holiday period. Lastly, how will this reflect on the US$.......Will folk still want to beat it with a stick? I suggest not. I would consider short positions at levels above 1.5500 and any higher rallies.