GU, GJ and EU Analysis Thread

45 Condor. Is that a regiment? Just wondering. I think you have high hopes of 1.7 and I hope you're right as I'm on holiday now for a week and I don't want to see a chart! I've set some market orders around the place and I will be looking forward to coming home.

Chart showing weekly Donchian break out:



Just as long as that last green bar doesn't get a massive spike sticking out of the top.

People come up to me in the street and say "smikester, how do you play a Donchian break out?". But I never tell them because I once tried to explain it to my mother and afterwards she said I might just as well have been speaking to her in Chinese. Her father brought her mother a gift of a musical box from China. When she looked underneath there was a little label: "Movement Made in Sheffield". Eh? Those were the days.

Admittedly, I have said 1.64 is the more likely in the first instance, but with the events of this week, and points that may be discussed over the weekend, I am thinking that the call from GS may be on.

Will trade my 4hr Guppy profiles as we go.

Donchia - when was the start of your first week for the current cycle?

Sheffield - yes, those were, indeed, the days.

Did a google for 45 condor, and realized that, and you, too, seem to be monitored on twitter feeds and forex sites. Punch your name in and click the links... it's surprising where our submissions to FF end up.

Hi All,

Hope everyone had a good week....great week for all types of trading especially scalping.

I have refreshed S/R levels on all GU time frames and have attached Monthly, weekly, daily and 4hr charts.

Long term I see GU heading for 6744 area which is the top of the major range we were in from May '09 to Mar '10 unless the MPC decide on a round2 QE stimulus for the UK. We have a clear weekly candle closing inside which confirms a valid break of 5980 - 1.60 resistance area (last year’s range support).

The 4hr shows we are testing the underside of the daily channel since breaking out of it on the 18th Oct. Given 1.6260 is strong daily resistance and this channel support line now resistance is being test I would remain cautious around the area and anticipate a reversal to maybe 1.60 or 5980. Given we break through this area and carry out a successful retest of 1.62 then we should be good for further bullish movement.

Market profile: Not a lot to point out here other than the single prints at the top of todays profile which may get filled by new NY close and the Strong Point of control area at 6038. Should we trade down from this area next week that level will act as a great bounce/reversal area...especially with 1.60 level just below it.

Hope everyone has a good weekend.

Stocky

It really is a case of the lunatics running the asylum.

http://www.irishtimes.com/newspaper/...breaking1.html

“Reminds me of you.” Said James as he watched the sharks circling above his head in the Coex aquarium. A place he had visited previously, and still considered to be smaller than advertised.

Mark smiled before retorting. “Come on, I’m like the majority,” the indifference in his intonation once more evident, “and do what I can to look after myself. There isn’t going to be any outcome here, it’s just puff and posture G20 style, as always. So what if Merkel isn’t happy with the FED? You don’t really think that Tim and Obama are going to volte-face here next week, do you? Sure, it will all be diplomatic in language, with gestures of understanding as Brazil and China voice concern as well. But that’s just for the public. It’s what is said and not released that I want to hear. Take a look at the Dollar index, on major support, which probably accounts for the positioning of Cable and the Euro on Friday. But if Dixie breaks, well, dear me, who knows how fast the Dollar will tank, and how fast oil rises. My worry is that China push for oil to be traded in currency other than Dollar. I mean, it’s not like the US can send CNN and the Marines ashore as they did when Saddam threatened to sell in Euro.”

James nodded as he watched the countless citizens, all seemingly oblivious to the potential events to come as they concerned themselves with sipping on mass-produced soft drinks whilst touring an aquarium that guaranteed an additional retail experience. “You never know. The fact that the FED pumped in six billion after saying in Toronto that they would not do it again, tells me Ben is clutching at straws, and the US are getting desperate to hold onto Superpower and reserve currency status. As for China and Saudi Arabia, I’d be surprised if they called for that, at the moment, as they both have too much dollar debt in their vaults; which probably explains their annoyance at the falling dollar, and hence are manipulating oil to cover losses from Dollar devaluation - and why behind the scenes they have both been buying as much Gold as possible, and taking on some debt from Europe. Let’s face it, Merkel isn’t stupid, and is slowly getting out of the Euro version one game and heading to Russia. Irish bonds are becoming untouchable, and as was said at the birth of the Euro, it will be Spain that crashes Europe. Next year is my bet. This QE nonsense was not supposed to happen twice, and certainly not within a year – as we said during QE one, it was not the thing to do, and not enough anyway.”

“Or that it is a calculated push to keep the stocks rolling,” added Mark, ignoring the tired faces of people who he thought not to have an adequate social security net to catch them if they fell from the carriage of employment, and so had to work what to him, was ridiculous hours for little pay. Although he felt that South Korea offered something to it’s citizens in the event of unemployment, he regarded the rules governing such security, and implemented after the Asian financial crisis of 1997, a crisis that many in Asia blamed on the USA, to not provide enough for basic living, let alone cover the personal debt so much in evidence in South Korea, and which he likened to that held across Europe, the USA, and increasingly, emerging economies elsewhere within Asia. “There’s no point missing out on the opportunity to jump on the ride in stocks whilst the bond market starts to get hammered. And hey, it’s not our money at risk, just the commission. Cut a little earlier than usual, and it should be okay. Got to be quick though, once the currency war really get’s under way, I’m taking my profit and hitting the bunker.”

“Yeah, I’ll be right behind you.” Proclaimed James. “And what did you make of the latest non-farm. What a farce. The US is getting as bad as us in the UK with the way in which they classify you as unemployed. It’s more like fifteen percent, and not the ten declared.”

“Hey, show me a government anywhere that tells the public the truth, and I’ll show you a state the markets will quickly drop. I wouldn’t want to live there. No inward investment, fighting over what work there might be, and for the rest, well, instant retirement instead of waiting forty years. I must say, I like how Cameron is selling the UK assets… great for short-term speculation.”

James cringed. “As I said, you certainly remind of these sharks. But like you said, free money and complicated financial set-ups that anyone without too much money has not the resource or time to learn much about. Well, I certainly won’t hold my breath for a state pension. That thing will be dead and buried before I’m eligible to see it. And if not, it won’t be worth much as, apart from fudging figures each release, the switch from RPI to CPI to measure it has all but confirmed its inability to provide for retirement.”

“I hear you there.” Declared Mark. “Anyway, back to the Park Hyatt for afternoon tea in the lounge?”

“Sure, why not.” Agreed James. “And remind me, the bank is picking up our tab at the end of next week, yes?”

Mark laughed at the feigned concern of his colleague. “Of course they are. And the taxpayer for the tab for all the civils coming over from Blighty.”

Just read this:

http://www.telegraph.co.uk/finance/e...he-dollar.html

After writing this last week.

http://www.forexfactory.com/showpost...&postcount=680

...and where is everyone?

Been busy with work this week, and struggling to keep abreast of editorial; full this week of Gold, Robert Zoellick from the World Bank asking for the return of the gold standard, World bank comments about Asia, Fed comments on bonds and commodities... pff, the list goes one.

Hope all are fine and dandy.

Bought a few pounds and sold a few dollars on the weekly close above 1.6 as was the stated plan, mostly off the table now a few lots left running.

Things are quiet for me, the way I like them.

Hope you are fine and dandy yourself matey

This week gone by was filled with a lot of jittery; currency wise. Stocky monk, your chart analysis continue to amaze me.
We've tested the 1.6 region twice and it held as support. currently i have a long position with a view that the bulls will continue their run to 1.64 as that seem to be in view once the high of last wee (1.629ish) is broken. I may be wrong...
someone pointed out a cup n handle scenario in GU... well, the neckline (1.6000) seem to be intact.

I attach GU charts - 4hr, D1, W1.

I don't trade Donchian channels in the accepted fashion (Turtle Trading). What we see there is a simple 20 period channel. It draws accurate horizontal support and resistance on every time frame. A good break above a flat line (1.6 in this case) gives a good probability of a long trade especially if, as in this case, the level is re-tested and rejected.

I see the next hurdle as 1.67. I can see 1.64 but it's not a strong level in my opinion.

Hi there, you're quite right re the 'noise' last week. Each time we went below 1.6, I thought it was the last time; till we went down again on Friday!

I now think, before we start talking '1.64', we still need to see 1.6040/1.6015 hold as support, as well as try and break 1.620, 1.625, 1.629, 1.632, 1.635, the resistance hurdles outnumber the few support hurdles...

Eurozone issues appeared to weigh cable down last week, but with the IMF and Ireland saying 'no aid is needed', and only 'rumours from euro sources' suggesting aid is indeed needed (all manipulation as we know), http://www.forexfactory.com/news.php?do=news&id=265592, we could see a little rally in the euro allowing cable to also proceed on it's way to 1.64 - the weekly, on the euro though, screaming 'bearish' all over though...

Also watching gold, which looks due a drop on the weekly,to see if this strengthens the dollar, but, again, the dollar looks top-heavy on the daily USDX chart.

The above altogether painting a picture of another jittery week ahead, imho.

Only in 2 long positions, one on the euro from 1.359, and on cable from 1.60, but, with all the choppiness of last week, expecting a similarly choppy week ahead. Whatever the case, SL at break even on both open trades in case we visit 1.353/1.345 on the euro and 1.589 on cable before a final move north towards the end of the month/year.

Ps. one area I still struggle in is in knowing which chart is best across all timeframes, i.e. I use a US based broker and a UK based one, and the difference in daily/4 hourly opening prices sometimes skews my thoughts (doesn't take that much...), so what's the best timezone to use when viewing the daily/4 hourly candles from you experienced ones please?

Good luck all this week, and hope there's some sun round where you're at; it's grey and wet down this end. (Phew, Arsenal 2, Everton 1, sun's shining again!).

i

Red

IbKA,
Do you think our longs will survive the bullish dollar index move?
A daily close below 16080 today will be the key for me. I see a bullish divergence on the USDIX and this might take it to 80ish level if it can clear 78.50 level today... of course it means further bearish move for EU and that will likely drag GU with it. UJ seem to be pushing further to the upside...

---sorry for the messy chart...

I got asked via a pm yesterday why my post was so 'cagey', i.e. 'what was I trying to say'; and my response was 'I'm trying to say I'm holding no bias following last week's movements'.

I see us, this week, just as likely to test 1.5930/880, as we are to test 1.6320, that's probably why I came across as 'cagey!'. As I said yesterday, I thought we were heading up last week, but just got a bit uncomfortable with the ease and number of times we sliced through 1.6040, and then 1.6000 i.e. too many times for me to remain fully convinced of the 1.64 straight run theory.

We've tested 1.604 again today, held so far; but the US is releasing so much news this PM, and I'm not so sure whether we'll retest and break 1.604 down to 1.60 or whether we're just heading up this PM to test last week's high at 1.618. In other words, I'm neutral, and holding my long, but with SL firmly set at break even - as I said, the one thing I don't allow to happen is for a positive trade to turn to a losing one.

The Euro and cable haven't been as tightly coupled as we saw last year btw, e.g. last week we had a 500 pip drop with the euro, yet cable didn't follow suit; it really depends on what's happening in the eurozone as well as in the UK and I think I heard on the news the PM is giving a speech somewhere today saying 'things aren't so bad' (really???). I struggled, for a while, to get used to this new way of thinking of the euro and cable as totally separate, and yet entwined currencies, but once I understood this, it's helped me no end.

I'd loveto see a hard fall of the euro to 1.33, but I can't quite see it alas. If I get taken out at break even at 1.359, then I'll be loading up longs at 1.3460 for a trip back north, potentially to 1.4350 (I don't usually trade the euro btw, a few esteemed contributors on this thread alerted me to its potential a few weeks ago, so I'm not in any true position to comment on this particular pair).

Hope you're well btw?

i

Oct 4 2010:

Good evening all,

Well, with the luck of the Irish ostensibly running out, I have had to consider the exposure of the UK economy to not only the consequences of what some spark elsewhere on t’internet branded the new ‘troubles’ for Ireland, but the implications for the UK should global confidence in EuroLand wane even further. Without reverting to research too much, the UK exposure to Europe in terms of trade is far greater than for a lot of other non-Euro denominated countries, and so as much as it grates me to say this, I have reconsidered my position for Cable, and will watch very closely the USINDX for signs of a rush to what, in spite of the G20 spitting contest and FED pump – Martin Wolf from the FT was very supportive of Benny boy, and I do not discount what Mr. Wolf says too quickly – is still the ‘accepted’ safe haven currency. Namely; the Dollar.

Now, with the leprechaun finding not a pot of gold at the end of his fading rainbow, but a dose of leprosy that the Germans and French seemingly knew was there previously, and are now appearing to distance themselves from, it remains to be seen what, exactly, will happen once the vultures over in Brussels are given the all clear to move in. As Dermot Ahern, Minister for Foreign Affairs of Ireland, said to a question posed by RTE television: ‘Things are happening day by day.’ Exactly, Mr. Ahern, and knowing how quickly a Guppy profile can be busted when major fundamental factors exert pressure, I am not so willing to ride much drawdown on any trade involving Cable or an instrument known to many as Fibre. Ah, fibre, just what one needs sometimes to cleanse the body of all those nasties.

According to Mr. Ahern, ‘there are no negotiations going on. If there were, the government would be aware of it, and we are not aware of it.’ Hmm, I smell something, something beginning with B. I will allow the reader to elaborate on that. You are either lying, Mr Ahern, or the Irish Government really can be held in the contempt that many Irish citizens currently hold. EU officials aver otherwise to conversations behind closed doors this weekend, so who is telling the truth? Or, are your comments yet another attempt to dupe the public whilst you and your financial cronies stuff the last notes in your pockets before running out of the door?

With Irish debt reaching record levels, and many holders of this debt trying to get it out of their hands as if it was a sparking detonator, the Irish Government, as like many others, seem unable to orchestrate an orderly evacuation. I say swallow a couple more pills of that laxative fibre, buddy, works wonders, but the fallout can get messy.

Opps, sorry for being crass, but couldn’t help myself. Oh, hang on, must dash straight to the next comment – can’t hold it. Germany is encouraging Ireland to take an EU-led financial rescue package, which would probably involve some element of IMF partnership – layman deduction, less cost to Germany - and so see a situation similar to Greece. Sure, the Irish Government is currently saying it will not need the full force, but we know, once it starts to go, there’s no stopping it.

Thanks to Alistair Darling, the UK will have to contribute to any bailout for Ireland, and if Ireland does fall, the repercussions for Europe could be many. I do think that the markets are becoming tired of European uncertainty, and see Ireland, and Spain – yes, I often consider Spain in my ruminations, and think that that country’s problems are about to hit the fundamentals – as the precursors to a full on exodus from the Euro. As I’ve said before, I actually think that European business would like to see a drop in the Euro to assist in exports, and wonder if the demise of the Euro to the 1.15 to the Dollar price is being orchestrated by governments and money men, under the guise of others facades. Pff, who knows?

Remember the French Bank FX traders?

http://www.zerohedge.com/article/eur...ls-gold-surges

...what, you're saying that the country I choose to spend my non-working time in has forsaken all traits of liberté, égalité, and fraternité whilst engaging in this great experiment of social cohesion?

Well I never...

Cable is really being pushed down before lunch, and EU not really following suit, whilst EG is taking a ride north.

Trying to find reason to suspect a mark down in Cable prior to some sort of news surfacing today, thus hitting the Euro.

No need to repeat what we are all probably reading today. Needless to say, it's all getting very messy in EuroLand.