GU, GJ and EU Analysis Thread

This is shaping up about the same way as last month the night before NFP. Although last monh we were heading for a double top on the hourly. Check out my views and charts here. Bottom line is it can happen again. Boys are unloading because I am thinking they know the direction and that direction is down. Lets see what happens around 134.75 - 135.00

Jim

http://www.forexfactory.com/showpost...stcount=228615

Like 45Condor, I was wary of leaving my LO short open when I went out, so I took half off at the MS1 level, leaving the remainder open with a +10 stop. This got hit when cable took off north after a clear inverted H & S on the 5m / 15m charts ......125 straight pips....

Now we have cable and euro at support with the pre FO traders putting in some volume.....euro support is at 2485 and cable's at 5150

I've taken small buys in each with very tight stops...I'm thinking pre NFP chop, so I'll take quick profits before I head out for more nautical matters - kicking the cat - rather Cats as both C18s have developed the same oil leaks http://cdn.forexfactory.com/images/icons/icon11.gif

I've posted an update of my charts on that other excellent thread
http://www.forexfactory.com/showthre...16#post3846716

Good day to you all,

Just popped in to see what you are all up to.

The weather in Cape Town is 22 degrees Celcius - no wind. A beauty. Whilst we are waiting for NFP, I am placing some shorts here - for sh*ts and giggles.

Whilst everyone else is betting on the soccer games today, I will bet on forex. I am leaving these open till close tonight. Now going to cut a couple of CD's with my favourite tunes. A lovely evening for BBQ, good whiskey, music and friends.

Life is good....

I wish you all a great week-end. Remember to spend some time with your loved ones and rest well.

Regards

Regarding yesterday’s exchange with Piters, I read today that a confidential report by Merill Lynch outlines an expectation that Spain will go cap in hand to the ECB for a loan within the next few months. In addition to this, Italy, too, may require assistance.

Yesterday, Jose Luis Rodriguez Zapatero announced that Spain is solvent and strong… hmm, well, I am still unclear as to the state of the Cajas; they are unlisted, deal with local communities, and account for almost half of all lending in Spain. National banks do not seem to be that forthcoming with the truth, either. Okay, so far the listed banks seem to have rode out the current recession rather well, but then it seems, according to reports, they don’t really deal with people from the street. That is, people wanting a mortgage. Hmm, not sure about that, and suspect the larger banks somehow underwrite the smaller, but are able to keep it off the books.

We saw that the latest sale of Spanish five-year debt realized the €3.5bn value, but at a rate of 6.6%... it’s becoming expensive. I suspect the buyers have done their math and will realize their projected gains, but this may be one of the last times to do so. I fear if/when Spain approaches the ECB/IMF, there will be a run on the Euro that will affect Italy, who in turn, will have no choice but to approach the ECB/IMF, and then who knows, Euro V1 may well be over. We see how quickly sentiment shifts as of late, so that Euro V2 on 01.01.11 is looking like a good bet.

This brings me to what I consider to be a point for future analysis. Germany does not have the money for this, and is increasingly looking elsewhere for trading partners. France, on the other hand, cannot afford for the PIGS to drop out of the Euro… thus presenting a dilemma for the Franco-Germanic partnership that heads the Euro, and accounting for, in this author’s opinion, the underlying reason for the increasing disagreements between these two countries. France is economically second to Germany, and I doubt very much wants to become the lesser player in any future Euro currency that will undoubtedly be dominated by Germany.

The cracks are getting larger as the transparency of fiscal state becomes more opaque, and the lack of central cohesion across Europe shows exactly what this author has discussed now for the last six months. A common currency one cannot have without a common command based on common levels of fiscal, political and legal standardization. That is, a true federation. This will not happen, and so we have a common currency that is failing within a fiscally, politically, legally, and culturally, divided region.

Fast approaches the time when this dream of utopia by money and power will be forgotten. Of course, again, it will be the people who suffer; prior to money and power attempting to build another utopia.

Hi Everyone,

Hope those who traded NFP's done well....I for one decided to take them off due to the huge move we had on Thursday...Market rarely gives fruitful pickings like that on consecutive days....Also volatility is the only guarantee through NFP's....

Anyway I have a longer TF post here...Data taken of a monthly/weekly chart....The strong move has taken GU upto the 1.52 zone and closed at 5199 on Friday...Whether you use horizontal Sup/res, Trendlines or both one thing is for sure we are approaching strong resistance. 5350 to 5471 is a very strong zone and we need get past in order to break the previous swing high on the daily if this up move is to continue.

5471 has been a strong supp/res zone on GU from far back as 1986 on the weekly and daily TF's.....Refer to monthly chart. Each time we have crossed this level since sept 2008 there has been extremely high volume and momentum when we have crossed this level.

The May monthly candle has 5316 and 4222 as its high and lows.... The June candle has formed an inside bar i.e. within the May high and lows.... Given we are approaching 5316 I will be looking for us to break this area and increase upward momentum in order to tackle 5471 and form a higher swing high on the daily. A break of this inside bar setup to the upside may give us the volume and momentum needed to break 5471.

Obviously trying to trade a monthly is no easy task by any matter but keeping in mind a break of the mentioned setup may give us GU's direction and target for the next 2 or 3 months. Next monthly resistance levels are at 5800 and then 6062.

Stocky

follow on from above post weekly and daily charts also....daily price target is on the basis that the monthly inside bar setup breaks to the upside.

Stocky

Liking it Stocky.

NFP - yep, missed it too, and glad so.

Last chart is UC, just showing first test of major fib/FE. One can see a little rejection, and I suspect we may see a little more, thus, if the inverse relationship holds - may see the 1-2-3 play on Cable as mentioned in the second chart.

Hi 45Condor,

Good thing we did have NFP's off...looked pretty messy to me. Have a good weekend mate...see you monday.

Stocky

I thought it rather funny to read the article as referenced in the link below. Funny in that my experiences fully identify with it.

http://www.telegraph.co.uk/news/worl...k-culture.html

Anyway, the point to the above is that Sarko the Barko has stated this week that; ”I've done enough on behalf of France to drag Europe out of the rut during the crisis. When it's about the CAP, my margin of negotiation is non-existent". He also announces that France is ready for pain. Hmm, let us examine a little further.

If there is one thing to admire about the French, it’s that unlike in good old blighty, here, the population still think that Bastille Day was last week, and give short shrift to the powerful. Anyone ever wondered why in France a banker and a bar tender still address each other as monsieur, and not ruffian and sir as in the UK? My appraisal comes down to the national psyche.

It seems embedded in every French soul that all are equal, and command the same respect. Liberté, égalité, fraternité and so on and so on. Whereas in the UK - ascribed as a fascist state dressed in the smoke of apparent democracy - many would look upon a bartender as a degree-educated individual that does not have what it takes to get a ‘real’ job; in France it is more that the bartender is an individual providing a service that the customer requires, and is thankful for.

This returns me to the farmers, and Sarko. French farmers, along with many other sectors, are able to bring this country to a grinding halt within a day. If ever Sarko was to state anything other than support, his problems would multiply just like that. And this begs the question: What will the French Government do about the following?

•Debt increased by 46.5 billion Euro in the first quarter of 2010 to 1.54 trillion Euro.

•Public debt accounts for over 80% of national GDP. It is rising at 2% per quarter, and is 11% higher than in May. That is almost unbelievable.

•So far in 2010 there has been a 44 billion Euro rise in state borrowing.


Now, the French populace pay a high price in tax, and, not unfairly, expect the government to take care of all public works and provisions… a relationship that works well when the PIGS are paying the interest on the loans that the French have given – especially Spain and Italy. But this trickle into the coffers is beginning to dry up, and before long, something has got to give.

Well, I suspect it will be the massive subsidies that France gives to the agricultural, manufacturing and energy sectors in France, and that make life just affordable for the average citizen. Whereas in the UK, any public backlash soon withers, in France, and other ‘main’ European countries, it may be a different story. Any cuts in subsidies will be passed on to the customer in the form of higher taxes. This is not a pain that the French, I believe, are ready to take. In the utopia that is the European Union, nobody wants to take a cut in the standard of living. This is the problem with living the dream of being a European, and soon the price that has to be paid for this will become too much, and why Europe in its current form, will fail.

Fillet mignon Monsieur? Erm, no, I’d better just take the chicken… oh, and a carafe of tap water, no Perrier, s'il vous plait.

Slovakia - still without a government post election. Iveta Radicova - to be sworn in Prime Minister - states that Slovakia will not block the European Financial Stability Facility, should some contries require it. However, there will be negotiations about the size, safety measures and requirements. Note: she campaigned againts a bailout for Greece, arguing that it was richer than Slovenia, and that Slovenia should not be made to suffer because of them. Ah, more of the same then. Slow response to disaster, and arguments galore between member states.

Meanwhile, under German law, it is impossible to force individual banks to publish results of the forthcoming stress tests. Many German banks have said they will not, and so this renders the stress tests as a non-event, and European banks will still continue to distrust each other, and hence not lend to each other. The format of the stress tests have not even been formalized yet, and it is reported that only national sector data would be released - thus not informing the financial sector of which banks are good, and which are bad. The German Landesbanks are reported to be some of those within Europe that would fail the stress tests.

Hmm, so I don't expect fast action or transparency anytime soon. Again, more of the same.

Staying on the shorts for Euro/Dollar.

Good day to you,

Closed the shorts early this morning.

Expecting a possible move higher from around here. Not clear yet. We may see a slight retrace and then continuation. I do not expect a lot of movement today, though.

Regards

Morning All,

Hope everyone had a good weekend.

Below are links from weekend posts....Monthly Inside bar setup.

http://www.forexfactory.com/showpost.php?p=3848862&postcount=106
http://www.forexfactory.com/showpost.php?p=3848888&postcount=107

This morning’s post shows a break of a 4hrly inside bar...Nice little signal we are exiting this sideways range since Friday. Previous 4hr swing high resistance is at 5110 area also the 38.2 fib area of Thursdays rally. This would be a good place to expect buyers to start coming back in. With this morning’s UK PMI data slightly worse than expected we may trade down steadily to there..

Plenty of single prints on thursdays profile running right down to 4990...also worth bearing in mind as we may attempt to fill these in. Thursdays point of control 4935.

Stocky

Hi Stocky,
Great that you have started the continuation of the G/U thread, do not know what has happened with the other one, but it is good that you have organised this one. I like your market profile analysis and I have been using it on MT4 with a different indicator, probably less accurate that the one you are acustomed to, but the idea of the volume related to the price action is there. I do wish you the very best and in due time shall contribute to this thread too.
2be

DT's GU thread was binned unfortunately but this is a continuation thread for a good technical analysis and trading discussion.....feel free to post when you like..

Tradewell

Stocky

Nice steady trade down to 5110/06 support....without NY coming in and runining things..lol PA picked up momentum as we broke out of the hourly flag.....If you missed the inside bar break at 5160 then 5147 should have provided some nice scalps today...

Now we have broken out the flag them single prints from thursdays profile are good targets for price to fill during a US bank holiday.

Stocky

5110/5090 support zone holding......hourly Pin formed.

If this support zone fails then them highlighted single prints in the previous post will be next targets....4990 is the last area where them prints end and is also the bottom of the the hourly/ 4hrly channel.


Stocky

A record jump in small business inflation was recorded for the first three months of this year – 2.7% - and represents the largest quarterly jump since records began five years ago:

http://www.telegraph.co.uk/finance/y...inflation.html

So, we are all going to have to bear the cost increases from the plumber and so on. Well, let nobody be surprised at this, and it will get worse.

What tickles me is the likes of Sarko the Barko and Obama the Obysmal, who seem bent on convincing people to spend as a way of helping the world out of recession, and then look confused when they see that this is not what people are doing. Quite the opposite, actually; as most people retain enough cells to understand that now is the time for home cooking and DIY, and not takeaways and new tiles in the bathroom.

Meanwhile, in other news, the Shanghai composite index has closed at a 15-month low. Slowing growth and rising inflation being responsible here. This leads me to editorial over the weekend. China Agricultural Bank was offering a rights issue with 10% discount to its rivals. Then the proverbial began to hit the fan at the end of last week – doubts about the health of the Chinese economy – and pretty quickly CAB saw a drop in the book value of its rivals, and so cut the discount to 5%.

It is alleged that CAB need 20 billion USD, to cover consumer loan demand. Hmm, I not sure even the crook Jim O’Neill feels comfortable with this assertion:

http://www.telegraph.co.uk/finance/c...ke-a-hawk.html

Anyone that followed what happened with Northern Rock will know that it becomes almost impossible to raise equity in a declining market, and so issues are not met, and the NR denouement is now well-known, and probably already being taught in first year economics degrees. Should we expect another example of investors witnessing the rebuttal of the issue, and subsequent run on the bank ? Probably, and even more so now, considering the current composure of the markets.

Hmm, unlike in the UK, where old Mrs. Smith ws told she could not enter her local NR branch to rescue her life savings, in China, maybe old Mrs. Sing will be met with the barrel of gun sent in by the Ministry of Finance. I dearly hope not, but don’t rule it out as the Chinese can be pretty rough when it comes to maintaining civil order.

Charts – S&P and FTSE. I choose these as, with everything seemingly falling apart, correlation to currencies may be difficult. Weekend posts indicate my views on Cable, Geppy and the Euro, but in submitting the charts today, I wish to take the opportunity to state that I think after the feel-good US bank holiday, big money is positioning for a run down. Of course, the European bank stress tests are, in my opinion, a nonsense in current form and amount of banks involved, but the market may play along with the charade of not knowing what the hell is going on, and await the July 27th announcement of results. This could give a little space for the Euro to be notched up a little, and the pound to be notched down a touch – as mentioned on weekend charts – before the turn for the rest of the year.

I am considering a short on EG around the 27th, should reaction be as I expect. So that means, go long…

IGNORE THE 3RD CHART....WENT IN BY MISTAKE
Hi Tradeprice,

Great to see our analysis looking similar!! I think we will see the bottom of that channel before attempting a go at the 5316 zone as per my longer term analysis.

EJ is not a pair I trade often but I do keep an eye it...I put a few charts together outlining my medium to short term views on the pair... On a general note I think EU is in a retrace phase on the weekly which is temporarily strengthening the Euro. UJ is approaching 87.0 weekly support since Nov '08....I think we may see a bounce around there which will weaken the Yen also. These two combined technical point about EU and UJ stacks up odds in the favour of Euro strengthening against the Yen...

From my charts I see it like this...

Last weekly EJ candle has formed a Pin bar after breaking 113.15 support. RSi currently oversold. Current price is 109.95...I see price pulling back to the 50% region of that pin before seeing strong buying pressure...If UJ bounces from 87 region that will only help.

The Daily chart shows we are in a downward channel since oct 09 but since May 2010 we have formed a secondary channel along side the existing one with a new support line. Fridays daily close has put us back into the original channel now. I expect we will test the top of this secondary channel and then possibly break to the upside targeting 113.15/114 High volume resistance zone. That would be my medium term target....depending on euro strength I would re-assess things at that point...but given the weekly pin that is usually a strong reversal sign which could have us trading to the top of the daily channel.

4 hourly has formed a HL and HH...we seem to have found resistance around 110.30...this could be an ideal opp to retrace on that weekly pin to 109 area (previous swing high resistance now support).

Hope that’s not too much of a rant but since I was going to look through all the timeframe thought I may aswell do it properly.

Stocky

3RD CHART....should of been weekly EJ.

here you go.

Stocky