eur/gpb

eur/gpb on the monthly time frame.

Lets look for the obvious and walk through this one. Price has come up from below and with one big push on the first up arrow price hit resistance, and on the second arrow this became support and price shot up again. This was back in the silly days where the world boom would never end, no different to day traders who think a nice day or two move they are in will continue to the moon.

Price went into full parabolic mode which I hope you now know as the ultimate sucker punch. The first triangle shows the peak of the move, but the next candle was a deep retrace, clearly you can see the desire for others in the market to buy into this from the price action that followed into the second triangle. If your head was screwed on correctly this would have been seen as a test of the break down and sure enough it proved correct for the bears. Down price goes, because it has no option.

It did reach the origin of the bullish break above the support line after the third triangle and as expected it rallied again due to clean long orders waiting there. The best the bulls could muster was into the most recent supply and also knowing full well that the possibility of pushing up through all that selling in one go is too much of a cost. So price once again falls back and hits the black line I have drawn in place.

Cast your eye left of the black line and look for where else price reacted off this rough price. It is between the second and third triangle. There is interest here given it held before and was also a place where the clearest buying was seen from the push off support the first time around. Current price sets up where no recent low was broken and also has pushed up from recent buying. All the triangles show selling which was deeply tested each time. While none of us can predict what will happen, its an interesting exercise to see will the black line be test or will price break the most recent high and break that last lot of selling. The two ellipses show an unconvincing sell off, and immediately after price shows much cleaner bullish activity. Perhaps sign of early bullish interest and to weaken any sellers left in the market. It takes a lot of money to turn a market and wearing out the other guy is important and clearing away those who want to take your orders and soak it up and/or sell even more into you.

This is very early days for longs and months will pass before we see a break/retest. Then the most orders will flow in and this will move....wait for direction first.

Down to the weekly.

Line on the bottom is our support line and clear in its effect. The up arrow shows clear buying and price shooting through supply, again clear to all that the bears are not in control. I cleaned up the two ellipses to show how the price action looks a little different as you drop down in time frames. Cast and eye into the second ellipse and see the second attempt by the bears...yes it bearish and not bullish. Price was taken up and deep into a selling area from its left and the following engulf was all you needed for a short. Eventually and with not the cleanest price action we hit the black line and this is the price area where the bulls became active and would have been pointless holding for more down side.

So far the last there candle show the bulls in full control and with a lower amount of sellers over head. The deep pull backs help in removing the sellers and they have little to sell from, they have no foundation.

Daily chart.

The most heavily traded time frame for most instruments. I have taken a slightly different tact here and not have you bored from repetitive text. On the very bottom we have our established and tested support. The lowest three arrows show buying, lots of buying and its coming off a good foundation and in the right place on high time frames too. If you only looked at this on a daily chart none of this would ever make sense. You miss out on the intel from the weekly and monthly charts.

Price moves up from a good place, gains additional long orders as it goes and breaks over head resistance. This break will have taken out lots of shorts and weak holders, and also have taken in day trader longs on shorter time frames. My earlier comment about price reaching for the moon is applicable to them here. Look at some facts, we have seen strong bullish activity, we have had support on the way up, we have the herd involved, we have broken resistance, we have taken out the most recent shorts, we have taken out the weak holders, all this means we have a lot of cheap entries for more longs.

Ok, so with all this cheap money what to do next?

The right thing to do as a pro trader is to dump the last of those hanging on our coat tails. How to do that, well a nice sudden and deep pull back would help. I see that on the second last candle. But is that enough?.....only time will tell, but it more of a shake out is needed, a nice deep retrace will soon get rid of all but the most well funded traders who can take the heat.

All we do is weight up the possibilities and plan for each one, then nothing comes as a surprise and there is something we have in mind...when...it happens. The top two lines have around 130 points of profit between each one, enough of a target and just eye balling what I see, one possible outcome is to let the herd come along for the ride and hit the next line above price, then fall back into the top of the current most recent high area where there is a reversal, gain support there and off up again. This is talking aloud and planning on what could play out and plan for it. You can think of other eventualities and watch price unfold but not trade unless what you see makes sense and there is an obvious direction and target.

4hr chart and low as I go for the present.

the bottom line just visible is our support line, two up arrows show buying which from the higher time frames was not as clear as these. A good reason why you must do a top down analysis is to see these, because they wont appear clear on every time frame, or on your preferred time frame. Open eyes see useful things if you look in enough places.

The resistance and support line here now shows multiple tests which is both good and bad. Good because its holding, bad because each test removes further long orders and makes it difficult for price to rise. The very last test came close to the week end and may have been nothing more than profit taking.

The last weak leg up is nothing I would read into, it was a Friday and end of week and all I can see is that the most recent selling from the single down candle I arrowed has been over come. We have a new week starting and it will be an end of month week and some good action may come our way. For those who dont know how the profit taking works, there are end of month and end of quarters where books need to closed and new positions taken. These events can over take pure price action and supply and demand, just keep tabs on it and expect it to happen. If you see crazy things happening around those times, stay out, or get out and wait for normality to return.