EurAnalysis

http://www.forexfactory.com/showthre...39#post5276739

Chart? Methodology??Strategy??? Or premonition?

Just wondering.........

Italy Bond Auction To Guide EUR/USD

eyed on result..

....

Why is it important to recognize the existence of a trend? Because then most of your trades should be in that direction and you must try to take every "With Trend" entry and rarely take Counter Trend entries.

The earlier you see the trend, the more money you stand to make. Focusing on the counter trend setups will likely make you miss the much more profitable but often scarier With Trend entries. The With Trend entries are scary because the market always looks overdone and it's hard to imagine that selling near the low of an overdone bear or buying near the high of an overdone bull could ever be profitable.

However, this is exactly what it is! The market draws in counter trend traders, and if you enter where they exit at a loss, they will drive the market in your direction, even though the market looks so overextended.

From : AI

watching the chart carefully...

Let's Start off this morning with some observations. At 11:00 PM EST EUR/USD had been holding very steady with little or no buying interest at 1.2815 to 1.2820. Then at that point until about 1:00 AM this morning it rose slowly to 1.2840. (Look at a 15 Minute Chart)

That was my short term break point that I posted yesterday at 1.2845. All of a sudden buying came in as the 15 minute candle went up to 1.2865. We probably had short covering over here as many had the stops at the point of 1.2845. We continued up to the High of 1.28799 at 1:15 AM EST and from there until the Europe open nat 3:00 AM EST the range was from that point to around 1.2875 at 2:30 AM EST and from there we see Red as it has now moved back to where it is now at 1.2839.

Here is a technical view with comments.

http://www.dailyfx.com/forex/technic...al_EURUSD.html

That is the pattern that I have talked about. Comments are appreciated if you have any. Good Morning.

You are starting to sound like Azumi

It's Friday ... It's Funday !!!

www.youtube.com/watch?v=cU_ADVeuNkY

That is an excellent resource Kno
I have been following Joel Kruger's analysis for quite some time and he always seems to be right on the money.

Thx. Can you upload the correct version with the timeframe included .

from Tor:
Mario Draghi – convincing and looks to be very much in control
a less downbeat Mario Draghi gave the EURUSD a lift yesterday to marginally exceed the upper levels seen earlier in the week – also helped by US retails sales figures, which disappointed a bit as they were down from the month before – despite being in line with expectations.

The new ECB President gives a good impression at his monthly press conferences. He is short but expressive when outlining the essence of the meeting earlier in the day, as well as ECB’s views on the economic outlook. The answers in the questioning session give the same impression. He is in control and he is focused – answering but saying not too much.

Journalists did not give him a hard session afterwards – but then he is not a guy easy to put off guard.

I especially noted his determination when addressing the possibilities the EU leaders already in their 29 January meeting could have the legal structure of their fiscal integration agreement in place. If they reach that by the end of this month – that is well ahead of my expectations and a STRONG pro Euro signal.

Earlier in the yesterday’s session we had Spanish bonds and Italian bills auctions which went well, as was better than expected industrial production figures for the Euro-zone.

Overall – it was a good day for Europe.

The previous resistance level 1.2815 gave way with a few pips – not really a breakthrough yesterday but enough to declare 1.2660 as a bottom for the week and put focus on next levels to the upside.

There are pretty high ceilings for EURUSD from this level. First resistance levels should come in at around 1.2900-50 and then there are just minor resistance until you get closer to 1.3200.

I would say this is where we should head over the coming sessions – unless there are some breaking news that would trigger general risk aversion.

I like the structured way ECB now is working and there is likely more progress on the political scene than market is aware of. Put this together and the medium-term outlook for EURUSD might well be a level 500 pips higher than where we are today.

Add a new debt ceiling debate in the US and the possibilities of more QE by the Fed – and we could see the USD turning pretty ugly over the coming weeks.

I would add that momentum for a medium-term bullish outlook is in place for as long as EURUSD stays above 1.2720.

With JPY and CHF both at levels where interventions might come – drop weekend positions - also for EURUSD. Central banks and politicians work at the fifth gear at moment and they might have some surprises up their sleeves.

Have a nice weekend.

Thanks a lot for that Kno. My main challenge right now is MM and patience.

That should have been it. I will upload it again.

..

Background on the fx market

The foreign exchange markets as we know them appeared after the breakdown of the Bretton-Woods agreement in the early 1970s when exchange rates started to float freely. Initially it was a market where the largest banks executed orders on behalf of clients and also themselves. Today it's still a market very much controlled by a small number of dealing banks even though that is less apparent than it used to be. In fact, even though you and I view and participate in the market through charts, the majority of transactions are still made over the phone rather than electronically (but the execution platforms are of course electronic).

There have been some major changes in the fx markets since the early days, such as the appearance of ever larger amounts of speculative capital with hegde funds now being responsible for about half of the daily turnover. Another major change is in valuation models and price changes to a much larger extent being tied to equity markets, something which older traders have had to learn to adapt to.

These changes have among other things meant that technical trading profits have diminished over the years. However, there's still a few hours every day when the market works more like in the good old days, and that is the basis for our strategy.

How the market works

The modus operandi of dealers at the major dealing banks is that they have an order book with client orders to execute. Their way of making money is through commission earned on those transaction, and through ways of turning their control of the market into profits through practices such as front-running, stop hunting etc.

The time period we are looking at is the early London morning from about 6am to about 9.30am. This is a time period during the majority of which no major cash equity markets are open, and it is the period of the day when the larger dealing banks in London and mainland Europe go about their business of clearing order books of orders close to the market. And this is the time of the day when markets are most predictable if we can somehow anticipate dealer operations and order flows.

The patterns that develop

The way the morning develops is that dealers push the price to levels where limit orders are placed, and the patterns that develop are that the buying/selling start at some level and keeps on going to higher/lower and higher/lower levels until either a consolidation or a reversal happens. These patterns typically start developing around 6am or 7am, and occur most days, but of course there are ranging or consolidating days every once in a while.

The evidence

Using 3 years of data the strategy of entering cable at 6am and exiting at 7am was tested, assuming that you got the direction right. 90% of the mornings the drawdown was less than 15 pips and the average pip gain at the close of the hour was 17.4 pips.

For a 7am entry and an 8am close, the drawdown was less than 20 pips 90% of the mornings and the average pip gain those mornings was 27.4 pips.

50% of the time, the 7am entry was a continuation trade, i.e. 6am entry was the better trade.

Clearly this is an extremely simple-minded strategy, but to be able to enter a trade a day with a 15/20 pip stop and have a hit rate of more than 90% and a risk-reward ratio of more than 1:1 is one of the most profitable trading opportunities there is. But it hinges on the assumption that we get the direction/trend of the following hour right. This is what we turn to next.

Price is trading@ the top of my in-decision zone..if it goes down to make a new low I will wait for the bears to finish if it goes long I will wait for the bulls to finish...either way I will not be entering in a order near my in-decision zone

Is the correction over?
Is it now time to resume the down trend?

Well I'm not going to rule out a test of the falling channel resistance around 1.29,, area but here is what I am seeing...

Price has now hit a confluence of the 38.2% orange fib and 50% blue fib
This area is also previously broken support turned resistance.

Therefore it is quite likely that it is done, but like I said, I am not ruling out a move to test the falling channel resistance today. Also being Friday, I suspect we may get some more Euro short covering action. This of course just makes selling the Euro even more attractive, hence my limit order at 1.2910.

Here's my H4 chart showing the orange and blue fib tools and light & dark blue channel lines.

Just have a technical question to you PT,

What is the screen resolution you have (eg 1280 x 1024 pixels ?) why am wondering is because if I put 3 other windows like RSI, Stoch, MACD etc my main chart windows gets smaller which I don't like so instead I put other indicator windows on separate chart when I login the trading terminal from my home.

I am using a 15.6" laptop as my trading machine.

I use 26 inch wide screed HD-LCD panels and the resolution I use is 1920 x 1080

Very true so your chart is pretty clear with all the windows