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Wedge & Predictive/Forecast Model Interplay | $EUR $AUD #ForexFriends, A very quick note here highlighting both a long-term pattern development found in a wedge, which I have overlaid over the results of my predictive/forecasting model, whose targets are defined as: 1 - TG-1 = 1.43744 - 04 JUN 14 and 2 - TG-Lo = 1.40384 - 04 JUN 14. With ECB decisions coming up tomorrow (05 JUN 2014), the Forex community may or may not have priced the outcome already - I personally tend to think that institutional traders would tend to position price to dampen losses against any surprise while maximizing on strategic positions. In the case of this pattern, I would say that dwelling at the upper portion of the pattern (i.e.: keeping price close to the upper border) does just that: It positions price against any unlikely upward surprise (i.e.: current rate is at 0.25%, while forecast/consensus is at 0.10%, thus likely to pull $EUR downwards) - But then again, this is all guess work, and this is the last thing I need. Instead, I like solid, reliable data for my forecast. PATTERN ANALYSIS: The pattern that stands in the background can be defined as either a Bearish Cypher or Bearish Shark. You will see that the least probable of the forecast level (i.e.: TG-1= 1.43744 - 04 JUN 14) comes into perfect alignment with what would complete as a Cypher, such that Points XA would project at 0.786-Fib ~ 1.43744, whereas a Shark would seek a deeper point of completion, which is not quite well aligned with the lower TG-Lo = 1.40384, considering that a Bullish Shark would seek 1.131 x zero-A position as its outer most completion at Point-C (as you may recall, the Shark is only a "quasi-pattern", incomplete by a one-off system, which starts its count at Point-zero, then moves on to complete at Point-C. This is so because the Shark pattern is the introducing feature of the 5-0 pattern, which completes at 50% of the recent Shark B-C impulse - Consult Scott Carney's Harmonic Trading books and website for more information on this). Cheers, David Alcindor Predictive Analysis & Forecasting ------------------ Twitter: @4xForecaster ------------------
by 4xForecaster
1
RBA Minutes - Neutral, sprinkled with dovishnessSo, price rallied, tripped the stop loss orders at 0.93157 and retreated. The RBA minutes are a lot more easier to read/understand. While 3/4th's of the minutes is just the usual crap, the last 2 paras was where the Golden egg was. "Aussie still high by historical standards" 1. Its funny how traders ignore the very obvious. Last year someone from RBA commented 0.8 is the more comfy level for AUDUSD, but Aussie failed to drop lower. 0.95 and above makes RBA very uncomfy. 2. Markets are fickle. US NFP was bullish on face value, but declining participation rate paints a diff. picture. Logically we'd assume USD to lose value. It did but markets seem to be ignoring that for now. 3. Price moves in support/resistance levels. After hitting 0.94, price was literally hovering around with no support. It found minor resistance at 0.93 and now looking to find support, which obviously sits in at 0.915 - 0.912 region. 4. May 8th the all important Aussie labour data will be released. Regardless of the outcome Aussie has to find support if it wants to push higher. Suggestions: Short but move to BE by EOD today.. or near today's high. Set pending buy orders around 0.912 - 0.915 region targeting 0.95, 0.96. EURAUD, the other chart i'm monitoring has not retraced to prior support to find resistance. So it justifies the Aussie shorts. P.S: Look to any Aussie pairs, AUDCHF for example and price rallied without finding proper support. EDIT: Forgot to put in the linked chart: (Post NFP analysis)
Short
by justatrader
2
AUDUSD - Why its important to have the big picture in mind***Why do you need to have an idea on the bigger picture*** I've seen quite some trade ideas between my last Aussie chart and now. Some calling longs, some calling to stay out.. I must admit, at times even I got a bit confused, but this chart has kept me on the right side of the trade. For example, the retracement to 0.93065 was picture perfect. (It was a high of previous NFP which was waiting to be picked). So the bias is still to the downside and short positions should be closed near 0.912 (there is some room to the downside but let's not get too greedy). Lot of US data today and tomorrow (starting with Aussie PPI early hours). We're looking for a drop to 0.91023 - 0.91323... (therefore 0.912 because its round and sounds like a nice number between those two) At current levels, there should be no reasons for RBA to take a dovish stand (If price hovers below 0.93 levels). If May's labour data for Aussie also comes out bullish, then we can head back to 0.95 levels. There's something more interesting happening at 0.95, which i'll update later on. ***Importance of referencing other pairs*** Check the linked EURAUD chart, which shows that a bullish move is required for EURAUD to confirm its bias to the downside. A retracement to 1.526 level or something. This points to an interim weakness in the Aussie to achieve that which coincides with the weakness in AUDUSD to retrace to NFP & Aussie labour data highs couple of months ago. Now combine AUDUSD, EURAUD and we can get a sense of direction EURUSD must take for the analysis to come true, which in turn can help you understand if any sudden moves opposite to the trade is valid or just a temp. glitch. Current risks: Refer to today's fundamentals from the US. Next update: Post NFP Good luck!!
by justatrader
9
Techs Calling Top; Funds Expect Reversal | $AUD $USD #RBA #forexFriends, The Aussie steamrolled over a potential counter-trend idea and marched on to loftier levels, which are now challenging significant technical patterns. In addition to predictive analysis and forecasting data calling for a reversal within the potential reversal zone (PRZ) range defined by technical data alone, a fundamental element is likely to come into play in that vicinity as well. TECHNICAL ANALYSIS DATA: First, let's define some of the points in the charts: 1 - Shark pattern, defined by its unusual Zero-X-A-B-C points, where Point-C remains pending - Shark is expected to complete at C = 0.96501 - Shark is a pre-pattern (pattern precursor) to its 5-0 Pattern acolyte 2 - A bifid Head & Shoulder, defined by two distinct shoulders and necklines - First set of shoulders (S1) project a symmetry (h1) at 0.96436 - Second set of shoulders (S2) project a symmetry (h2) at 0.95003 3 - A 5-0 pattern aiming at a return to its Point-D, which remains HIGHLY speculative - The 5-0 pattern is a finding of Scott Carney, worth studying on his www.harmonictrading.com site - While a Shark can complete at 0.886 x 0A or 1.131 x 0A, expect a minimum retracement of 50%, hence defining the five-zero of the 5-0 pattern. PREDICTIVE ANALYSIS & FORECATING DATA: A retracement to a supportive 0.92682/0.93013 range is anticipated from the recent impulse. A break and close below 0.92266 should concern vested bulls. Otherwise, directional bias remains bullish and sees a probable continuation into the PRZ defined above, favoring TG-1 = 0.96121 as a probable target. FUNDAMENTAL DATA: RBA opted last month to keep rate unchanged, although noting that a recent rallying of the currency might temporarily impact the anticipated economic recovery. Indeed, recent improvements in core economic data has pushed the pair of this export-dependent continent to increasingly higher levels. So, expect the RBA to provide verbal hints that could help counter the current appreciation of the Aussie. However, before any verbal intervention turned into monetary policy action, several months are likely to go, as long as the rate remains distanced from the 0.9500 water mark. OVERALL: With all of its pattern tools out of the box, technical analysis is coming out screaming and banging at price, as it nears a narrowly-defined PRZ. A layered analysis/forecasting with my own prop system falls within this narrow PRZ, so there is little left for loftier delusions at this point. Also, Stevens of RBA let the pair rise against a non-intervention stance, risking a near-term squeeze to higher AUD levels. But now that the positive domestic data is getting absorbed, a little RBA jawboning might suffice to keep bulls at bay. I expect this to occur within the range defined by the technical data above. Directional bias is LONG, but I will keep the indicator at "NEUTRAL" to emphasize a nearing of significant technical levels. It will take an early market reversal sign, then a bearish market reversal signal to change it to SHORT. That will take a bit of time. Cheers, David Alcindor Predictive Analysis and Forecasting Get my signals, analyses and forecasts on Twitter: (Alias: @4xForecaster) ------------------------------------- Disclaimer: - All my comments are founded on unshared proprietary as well as common knowledge of technical analysis: Do your own due diligence before trading any market/asset. Additionally, my signals, forecasts, analyses and directional opinions are for educational purposes only and are not trading recommendations. Again, do your own due diligence first, then seek financial advice from a licensed professional, and only then enter the market at your own perils - David Alcindor - TradingView.com Alias: 4xForecaster
by 4xForecaster
10