eur/usd Sept 7 2017 update

Ok time for an update on the last eur/usd post. Lets see how it has developed and if the pair are playing out with the same long bias as before.

First chart is the monthly.

Looking at the right hand edge of the chart I can noted three candles. 1 is a push through of the top of the established range, 2 is not an uncommon candle and appears to be indecision, but it does close above the previous candle which is bullish. 3 is still forming and far too early to call. Above and left of price is where pro money shorted the pair back in May 2014. While all this may seem to be light years away, these price areas are clearly of interest to pro money and its best to be highly tuned to what takes place in them when price gets into them in the future. There are several types of pro money folks and it is the investor type who will become involved in this areas and hold for long periods of time and take the long term view. The daily price moves below the daily are nothing but noise to these people. 

Far too many day traders also look and place too much decision making on time frames below 4hr. That is the ideal way to go broke.


Weekly chart.
 

Upper left is pro money shorting the market and the nice fall away to their target area. The bottom of a price range formed here and has had three tests of its lows and the most recent test will look like a bearish break out to day traders. Again, another nice way to go broke. The higher time frames is where you see the best clarity.

The blue line is the upper portion of the range and we have broken through and seen a failed test of the top of the range, only for that test to itself be false. The dip inside the range will again look like a bearish trip to the bottom of the range and many day traders get taken out. Price did close outside of the top of the range after and a strong move higher following that false bearish week.

FB is just short hand for false break, I try not to shorten words where possible and keep a chart clear and make it easier to see and read. The second last candle breaks the strong bullish candle and will have gotten day traders long as they will have seen continuation. It turned against them as I would have expected to take out stops, get shorts in the market and in turn, have them taken out again once the new price direction continues. 

You should start seeing how pro money will milk the market of every chance it gets to get cheap orders in the market, by taking yours. This happens every day and will continue to do so as long as folks dont wait for established areas to be used again by pro money to load up. 

An accurate old saying still holds true, buy low and sell high. 

Daily chart

Blue line shows the old high price of the upper portion of the established price range. We have now seen price break through it and come back to test this upper range. There are a few tails on candles showing price pushes into the range where some day traders on low time frames will have been duped. 

On the upper most candle we see a low close and selling came back into the market. The function of that candle was many, it tested how much selling would happen, it got day traders short, it brought price back into the origin of the bullish move up, and it stopped out day trader shorts, filled new pro money longs at the best price at the time. 

At the current candle price we see it push into the area of where the FB candle topped out. If no major short reaction takes place, then price wont have much effort in making higher prices.

4hr chart.
 

A little closer in on the action here, and we can see the push higher and notice one interesting fact. The price action shown is not major selling. It has been more orderly and controlled. The price ends up at the origin and and reacts nicely, not a bear to the seen!

Soon after a nice upward thrusting candle pins the most recent sell off and takes out most of the short orders there and allows price rise with no major selling coming in. This is good news for the bulls.

1hr chart.

Lower blue indicates the upper price range tested and held. A large bullish candle spikes short term supply and assists price in getting back into the lower range of the candles that have risen from the upper price range test. The sellers will now have lesser ability to push price lower and some positioning has to be done by pro money to feed in orders where they can and where it wont be seen for an extended period of time. This is what sets up in where the choppy price action follows for some time. The lack of supply is the most helpful guide we have here.

Lastly, the last few candles show strong price movement upward and a close above the spike with little reaction short. This can only be good for higher prices.

The most obvious target will be the prices left of the chart could lead us into the close of the market this coming Friday.

Eur/Usd

After much delay I am finally getting back to putting some posts here for you all. Lets get stuck in and get back to the Euro/Usd and see how it is looking.

First up is the ten mile high view based on the monthly chart and get a wide look back through price history and see what stands out.

A price chart never lies or will spin you some story you hear from vested interest folks. Always look at what is obvious and clear. What is obvious here is price rose from the lower left to a high in the middle of the chart, then price fell sharply, recovered and fell sharply again. The next rise in price was laboured and so was its subsequent fall. Looking at the low part of each of the three attempts to rise shows us something interesting on the final attempt to rise. The time taken to rise was longer than all the previous attempts following the main fall in price from the middle of the chart, and we only from this last painfully slow rise do we see a clean, clear and obvious fall in price where no bullish activity of note took place.

At the end of that fall in price we see a narrow range relative to this time frame as been established and only now is price approaching the top of this range. The blue line indicates the upper part of the range and an area we as day traders need to start paying attention.

Next time frame, the weekly.

More intel comes to us, the blue line clearly shows the top of the range established on the monthly chart. Ignore the tiny red candle, it is only forming and not yet completed its journey through time. Its reaction so far gives us more information and as we drop down through other time frames we will get more and more intel to work from.

I have placed a tick mark showing an area of interest that will be on our radar if we see price break the established range and later test it, we want to be aware of areas of price support and profit targets well ahead of time. We now can see where price should get support if the range is going to be broken and tested, and we also see where a likely price area for profit around 500 points north.

Now we move to the daily time frame.

A short description but a telling one. The blue line is the top of our discovered price range and price has bounced off it and fallen back. We can say with full conviction that the range has not been broken. Ah, but the eagled eyed of you will say, hold on a second. What is the yellow line, this line is a second price area just below the high of the range denoted by the blue line. I drew in the yellow line to attract your eye to something worthy of note. The more nearer term high from the yellow line could be a good place for price to gain support from buyers who could send it with enough force up through the higher up blue line. It will be less of an effort for price to rise if this happens. Less effort means less cost and less cost means more profit, and more profit means pro money is happier to take the trade higher and break the range. But, we wait and see and keep an eye on how price reacts.

As the time frames go lower we see more and more of the methods of pro money.

Next we look at the 4hr time frame.

Between the two lines there is around 90 points. The second last candle shows how price pinned the lower end of this smaller range and closed higher up on the candle body and only a moderate amount of selling coming in. The way in which the selling came in wont be seen until we drop lower down in time. So lets move on.

1hr time frame.

An even clearer picture of price hitting the lower end of the price range with a bearish candle closing with buyers coming in, and the following candle closing bullish and the 3rd last candle closing with some sellers coming in, but not enough to push price back down given the later candles all closing with activity at their upper ends. So far, no major selling coming in. But look at the huge effort by pro money to push price higher in the box, that was a serious effort and not one that will fail without a fight. The fight of choice is now apparent, it is to tire out and try false breaks to gain enough orders enabling pro money to push again. This is not yet proven, and we need to wait, bit so far everything they are doing is bullish.

Lets drop down again.

30 min time frame.

Final chart given we are in a trading range. Price has risen toward the right edge and is in a holding mode. No major selling, no major buying and someone will have to give soon. Perhaps coming into the London close will see a retest of the lows or maybe a false bearish break, we simply dont know yet and must exercise patience and trade what we see. Some news driven even may be enough to bust price out and then we watch for a test where the loosing side gives up and the pro's take it from there.

extended break

Hello all,


Had a much needed break over Christmas and went on an extended trip to Asia and it is now back to normality once again and hitting the charts.

I will post some charts and thoughts up very soon.