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Daily Cable Analysis

  • #3,381
  • Jan 23, 2007 5:30pm Jan 23, 2007 5:30pm
Quoting viking
I think this week is last chance for GBP to touch 1.2000 ...

tomorrow we have 2 hot news : GDP and BOE Meeting Minutes (GBP)

lets see what will happend
I try not to get too hung up on "catch numbers"

I know that the big 2.0 is great to talk about but that is not likely to determine the value of nor the turning poing on the pound. I have bloomberg on most days and they are always hung up on some hype number. Be it the S&P, oil, or the DOW. While it is entirely possible that the pound will touch 2.0 and then fall 2000 pips directly, I would not call it likely. This is the currency of a group of countries, not starbucks.
Profit is where readiness meets Opportunity
  • #3,382
  • Jan 23, 2007 5:31pm Jan 23, 2007 5:31pm
My current res and sup levels:

R3 = 1.9863
R2 = 1.9828
R1 = 1.9806
S1 = 1.9764
S2 = 1.9742
S3 = 1.9707

What do you guys think? Comments much appreciated

Btw, I'm currently long GBP/USD and hope that it'll hit 1.9863 soon, will have to watch for BOE news before seeing if it will break 2.0!
  • #3,383
  • Jan 23, 2007 5:57pm Jan 23, 2007 5:57pm
Jon, just a suggestion. Bank your trade and wait for confirmation.

If in doubt, stay out.




Quoting Jon Reed
My current res and sup levels:

R3 = 1.9863
R2 = 1.9828
R1 = 1.9806
S1 = 1.9764
S2 = 1.9742
S3 = 1.9707

What do you guys think? Comments much appreciated

Btw, I'm currently long GBP/USD and hope that it'll hit 1.9863 soon, will have to watch for BOE news before seeing if it will break 2.0!
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  • #3,384
  • Jan 23, 2007 6:06pm Jan 23, 2007 6:06pm
Quoting wryan
Jon, just a suggestion. Bank your trade and wait for confirmation.

If in doubt, stay out.
What about the hammer reversal in the 1hr chart?
  • #3,385
  • Edited 6:14pm Jan 23, 2007 6:11pm | Edited 6:14pm
Quoting Jon Reed
What about the hammer reversal in the 1hr chart?
4 hour timeframe trumps 1 hour IMO.

1 hour says buy. 4 hour has not broken up trend yet. So IMO up until 4 hour evening star has been confirmed 'with a trendline break.'
  • #3,386
  • Jan 23, 2007 6:17pm Jan 23, 2007 6:17pm
Quoting wryan
4 hour timeframe trumps 1 hour IMO.

1 hour says buy. 4 hour has not broken up trend yet. So IMO up until 4 hour evening star has been confirmed 'with a trendline break.'
Ok, thanks for the advice Do you think it will go upwards once BOE news is announced?
  • #3,387
  • Jan 23, 2007 6:23pm Jan 23, 2007 6:23pm
I think theres to many bear signals to be thinking long here. Anything CAN happen in the forex and anything WILL happen.

The pictures in my post is reality. The most real thing no assumptions. I like posting what i see now and not what might happen. What will happen is to be determined.
  • #3,388
  • Jan 23, 2007 6:25pm Jan 23, 2007 6:25pm
Quoting Jon Reed
Ok, thanks for the advice Do you think it will go upwards once BOE news is announced?
Your welcome Anything to kill time and to be off some help to anybody.
  • #3,389
  • Edited Feb 2, 2007 5:49pm Jan 23, 2007 7:43pm | Edited Feb 2, 2007 5:49pm
Quoting wryan
4 hour timeframe trumps 1 hour IMO.

1 hour says buy. 4 hour has not broken up trend yet. So IMO up until 4 hour evening star has been confirmed 'with a trendline break.'
And the Monthly trumps the 4 hour and all other time frames.

The real question with the Monthly is the final price it closes at this month, then we can see if there will be this upward continuation. Right now, this candle could turn to a big doji if price drops hard.
  • #3,390
  • Jan 23, 2007 7:53pm Jan 23, 2007 7:53pm
Quoting wryan
Your welcome Anything to kill time and to be off some help to anybody.
Great advice, looks like I got out just in time, cable is starting to fall again
  • #3,391
  • Jan 23, 2007 8:24pm Jan 23, 2007 8:24pm
although right now wouldn't be the time to enter on this, this is the picture of what i see on the dailys and weeklys.
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Man who scratches ass should not bite fingernails
  • #3,392
  • Jan 23, 2007 8:40pm Jan 23, 2007 8:40pm
My outlook for feb is a down month.

Red Arrows telling me after a month of of new highs, down month will follow.
Green the opposite.
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Mono
  • #3,393
  • Jan 23, 2007 8:48pm Jan 23, 2007 8:48pm
Here's the Weekly outlook.
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Mono
  • #3,394
  • Jan 23, 2007 8:53pm Jan 23, 2007 8:53pm
And the Daily
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Mono
  • #3,395
  • Jan 23, 2007 9:39pm Jan 23, 2007 9:39pm
Quoting FXopportunist
I try not to get too hung up on "catch numbers"

I know that the big 2.0 is great to talk about but that is not likely to determine the value of nor the turning poing on the pound. I have bloomberg on most days and they are always hung up on some hype number. Be it the S&P, oil, or the DOW. While it is entirely possible that the pound will touch 2.0 and then fall 2000 pips directly, I would not call it likely. This is the currency of a group of countries, not starbucks.

It should offer huge resistance because of option trading..simple as that
  • #3,396
  • Jan 23, 2007 9:52pm Jan 23, 2007 9:52pm
why is it when, I'm awake, the two headed dragon is asleep and soon as I go to sleep it awakens?
  • #3,397
  • Jan 23, 2007 10:49pm Jan 23, 2007 10:49pm
Quoting Jon Reed
Great advice, looks like I got out just in time, cable is starting to fall again
I hope it helped! No sure thing in forex, but probabilities predict most of the time
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  • #3,398
  • Jan 23, 2007 11:11pm Jan 23, 2007 11:11pm
Quoting wryan
I hope it helped! No sure thing in forex, but probabilities predict most of the time

There are also other things going on in that chart that offer some probabilities. if we draw a trendline for the most 2 recent major pivot lows - end of yesterday to earlier yesterday, we will see that price spikes below trendline then begins coming back above it on the next hourly bar.

As for MACD, the lines are still above the zero line insinuating a fade of the negative macd histogram, however, it is also very possible for them to come below the zero line as your time frame of 1 hr may be too short to withstand illiquid trading until frankfurt/london.

Lastly, and more importantly in my opinion, is the move from the high as the same characteristic is being experienced in rsi as well as other momentum indicators. If we look at the histogram and its position at the pivot low before the high, and compare it to it's position at the pivot low after the high, it becomes clear that a large shift in momentum to the downside has been unable to push price past its previous pivot low ( a very bullish signal ).

Of course, it is true anything can happen, but with oscilators I have found that trend continuation patterns are more reliable for me in terms of timing than are reversal patterns.

You can almost see it happening even on this chart - picture it, Price goes back up to or above the high forming a double top, however with MACD in the position it is in, chances are that the histogram will fall short of its previous high, forming a divergence that may then add to the already set tone for a decline, unless price shoots up enough that momentum is still increasing and overcomes its previous high. This is where reverse engineering the indicators comes in handy so that we may see in advance where the price would have to shoot up to in order to avoid divergence.

Anyway, this is just one scenario, but usually one worth examining as positive and negative reversals have a high probability of coming through. Then it is just a matter of coming up with a strategy to take advantage of this edge.
Man who scratches ass should not bite fingernails
  • #3,399
  • Jan 23, 2007 11:14pm Jan 23, 2007 11:14pm
Posts from earlier today stated that the candle formations from a 4-hour chart "trump" the candle formations on a one-hour chart and that the monthly chart trumps the daily and weekly charts. I guess I am a victim of backwards thinking and welcome comments regarding the following:

The reason a chart shows a blue/bullish monthly candle is because the corresponding weekly candles are bullish, and the reason a 4-hour candle is red/bearish is because the last few 1-hour candles are predominantly bearish. In other words, you would not have a bullish monthly candle if the weekly candles for that month were bearish. Same thing with a 1-hour candle: a red 1-hour candle is created from several red 15-minute candles. Therefore, could it be said that the lower timeframe candle formations "trump" the higher timeframe formations?

OR could both explanations/views be valid depending on one's trading style? In other words, the 15-minute candles will trump the 1-hour candles for a "scalper" whereas the monthly candle will trump the 4-hour candles for a "position" trader.

I am posting these questions because I would really like to hear other traders' views. It is not my intention to say that earlier posts are "right" or "wrong." Thanks in advance to anybody who takes the time to respond.

Happy trading. Let's all make some pips.
  • #3,400
  • Jan 23, 2007 11:20pm Jan 23, 2007 11:20pm
Quoting Leugimp
There are also other things going on in that chart that offer some probabilities. if we draw a trendline for the most 2 recent major pivot lows - end of yesterday to earlier yesterday, we will see that price spikes below trendline then begins coming back above it on the next hourly bar.

As for MACD, the lines are still above the zero line insinuating a fade of the negative macd histogram, however, it is also very possible for them to come below the zero line as your time frame of 1 hr may be too short to withstand illiquid trading until frankfurt/london.

Lastly, and more importantly in my opinion, is the move from the high as the same characteristic is being experienced in rsi as well as other momentum indicators. If we look at the histogram and its position at the pivot low before the high, and compare it to it's position at the pivot low after the high, it becomes clear that a large shift in momentum to the downside has been unable to push price past its previous pivot low ( a very bullish signal ).

Of course, it is true anything can happen, but with oscilators I have found that trend continuation patterns are more reliable for me in terms of timing than are reversal patterns.

You can almost see it happening even on this chart - picture it, Price goes back up to or above the high forming a double top, however with MACD in the position it is in, chances are that the histogram will fall short of its previous high, forming a divergence that may then add to the already set tone for a decline, unless price shoots up enough that momentum is still increasing and overcomes its previous high. This is where reverse engineering the indicators comes in handy so that we may see in advance where the price would have to shoot up to in order to avoid divergence.

Anyway, this is just one scenario, but usually one worth examining as positive and negative reversals have a high probability of coming through. Then it is just a matter of coming up with a strategy to take advantage of this edge.
Wow! Thanks for that chart analysis! I must admit that I frequently put different indicators on my charts, but I really don't know how to properly use them. Your explanation of the MACD was very informative. Now I know something to look for on my charts.

I find your posts to be very educational. Thanks for taking the time to share your views and insights.
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