Circular Trendlines

Due to the nature of the break of the red circle, I will be reluctant to say that any furter down move beyond the zone of 88.6 fibonacci retracement of the move from 3142 to 4253 has a high possibility of happening. A true pole break vs a fake one is shown in the diagram, and at this point, all that is needed is one move inside the perimeter of the red circle to confirm a shift toward bullishness.


There will be no GBP/USD forecast, since structure is not clear at the moment on that pair

I am incorporating a new technique in my drawing based on few rules that I have been experimenting with.

I hope that hopefully through the comments and questions that people ask we can make circle drawing technique more formalized.

I am trying to formulate few rules so that the circle drawing doesnt turn out to be in such a way where "Its Fitting The Circumstances" as few members on this thread have mentioned before

So the new rules say that:

1. Pick a circle with lots of points on it. This circle needs to have at least 3 points touching its perimeter. This circle will be called "Reference Circle"

2. Draw all other circles in such a way where either
A. Their center will fall on the perimeter of the "Reference Circle"
B. Their Center will fall on the intersection of the perimeter of other circles drawn using "Point A"
C. Their perimeter will fall on the "Reference Circle"

Using the rules above I have drawn circle on the hourly chart of the EUR as follows:

As mentioned in step #5 of the previous post, we did have a low, and give and take 30-40 pips we ended up at 3210 today. There is high probability for a bullish spike upwards to 3400 region.

Here is the view with the new circle drawing method

Here is the forecast, with upwards action to 5550

Hi Kambooj,


interesting new rules for drawing the circles. :-)

My actual EW count supports your view. We have likely (maybe a bit more down) finished an impulse down, now I would like to see a corrective wave up to the wave 4 of one higher degree, which is around 340

This pair is switching to a buy mode, and upward movement beyond 3400 is expected, but before that we could have a large retracement towards the lows of 3300.

Suggestion is to buy on dips. You can also place a pending buy above the current high at 3400

Outlook is bullish with best buy opportunities at the lows of 5500/highs of 5400

On the H2 time frame we can see a strong desire to avoid the region of 3280-3300 for this pair. However the bounce downwards from the red circle has not gone into the territory of the base of the green circle, which is around 3260. If it does we will most probably be going more downwards towards the perimeter of the blue circle which is 3175. For now the lower time frames suggest a desire to climb back up towards the 3350 and 3400 region. Any short order is best if its placed as a pending order right now

Currently this chart is not offering a lot of opportunities to draw circles on different time frame, and the best time frame to draw any kind of curvature is the M15.

A challenge of the blue median line and sustenance above the red curve are suggesting upward momentum to resume towards 5780 region.

In a previous post on November 17th I did show a trendline on the daily chart where the EUR will be targeting it which is extremely important for the future movement of this pair:

http://www.forexfactory.com/showthre...05#post5140905

The trendline shown in blue on the daily chart has been hit, and the 300 pip movement within 1 hour is just what was needed to bring us back into the 88.6 retracements scenario that is typical of this pair in the month of december.

Since the 23.6 retracment of the move from 4250 to 3212 has been broken, the most logical target for a retracement will be the 3600 level which is the 38.2 retracement of the mentioned move.

Currently the move that has started from 3212 is estimated to go as high as 4100 in the long run before another series of rangebound motion will begin that will form a triangle within the space shown on the daily chart.

View from the H1 time frame

Here again we have another example of a small circle generating considerable thrust from its perimeter.

You can find more links to such circles on the first page of this thread, since I continously update that page, whenever I find new examples of these small circles.

Here is the view for this pair. Movement is upwards till 5800

Outlook on this pair remains bullish with target of a 3585 being reached today, which would complete the perimeter to perimeter move of price action that started withing the perimeter of the black circle.

The maximum rebound downwards is to the perimeter of the red circle.

Given the fact that most impulse patterns do not retrace much beyond 38.2 in their initial stages of their development and only retrace to considerable values beyond 50% fibonacci after the 5 waves complete, the probability of hitting 3320 region, which is the perimeter of the red circle is low at the moment.

We do have a 38.2 retracement already:

3417 Low is very close to 38.2 of 3258-3533 which is 3430

So from a behaviour perspective I would strongly be inclined to say that we wont come below 3417 low.

From a price extension perspective the 1.618 price extension of the 3258-3533 move is 3703, and 1.382 price extension is which is 3638 which both are a highly probable target if we go beyond the perimeter to perimeter move within the black circle.

A third touch to the lower circle in blue could happen. If it does then motion will break upwards along the perimeter of the blue circle, using that circle for support.

If any break upwards happen before hitting the blue circle then support will be formed on the outside perimeter of the black circle.

Currently trend is up on the larger time frames, and any dip close to the blue curve shown here can be used as a base for future buy positions.

Best strategy would be pending orders to go for a buy at 5750 or 5625 region.

Pending orders for a sell below 5690 is a good choice but its a high risk trade.

Chance of a drop to 3350 remains a very high possibility given that we are in the weak zone of the shown circle and movement upwards has taken so much time to stay within the 3420-3520 range.

Will update soon on lower time frames before 8:30 AM EST

Here is the M15 View...

Perimeter to perimter move allowed within the red circle up to the smaller zone at 3500-3505, but thats it as far as any retracement for a up move is concerned.

If 3500 breaks we are going down to roughly the south part of the black circle at 3440-3450 area.

Next update after 8:30 AM...

Going more down towards 3350

Here is the current view ...

Here is the update