Circular Trendlines

In a previous post:

http://www.forexfactory.com/showthre...75#post5623075

the probability of a turn was discussed that would happen around on May 4th for the wave that had started from 2997 on April 16th.

Almost close to April 4th,

After the drop from 3280 towards 3100, there was a strong bounce towards 3180 again. Although 180 pips did went quite fast, but there seems to be quite a bit of hesitation in showing desire to go further down. In another word the speed of the upward motion is slightly diminishing.

When a correction takes such a long time, as it has been with this particular wave (April 16 / 2997 onwards) then a stronger than normal thrust is required. Such thrusts are reminicent of the thrust that developed 3378 on April 2nd

When a lack of further desire to go downwards is being observed, chances are high that the thrust down was only a setup for further upward motion.

Looking at the time slot on the H8 chart a time slot close to May 11 pops up for the next phase of any possible action.

Because again it looks like we have been caught in a false start of the drop that has started from 3280 on May 1st, I can only conclude that this drop is a setup to go long until around May 11

But long to where?

The prime target is a break of the upper trendline in blue.

However

Given the discussion we had earlier about the weekly time frame, this break will be a false break, that means the high of 3280 will get broken, and we will probably have 3310-3330 as a high by sometime middle of next week, then after that the true downtrend towards 2900 will begin.

If you notice on the H8 chart on February 7th 2012 we also had a similar thrust developing toward 2970 level.

My prediction for tomorrow is a possible dip to 3120 and then a rise upwards, or we will rise right from 3150, but downward direction is starting to look a little bleak.

Today we faced a important resistance at 3180, but the bounce off that resistance was not favorable.

In a downtrend scenario we need 3150 to be broken decisively and fast, this is also another sign that we had a false start for a downtrend.

EUR USD 1m CHART
is this correct?
thanks

refresh

Just want to draw attention to a modified version of the mentioned scenario in my previous post.

My experience with NFP has been that if few hours before NFP starts moving one way, chances are high that the main intention is in the opposite direction.

There is a alternate version of the above scenario that deserves attention and that is a slight lower low being made first, then a rebound upwards.

Based on the time and desire to go further down, the recent 180 pip drop from 3280 lacks the ingredients to manifest itself as a authentic move down. Large retracements are not characteristics of such a move.

There are several areas on the below chart showing a slight break of a low followed by a strong rise. Notice that after the strong rise, there was enough momentum generated to break the intended low with complete confidence.

So dont be fooled by a slow decent downwards towards 3100, to break yesterdays low or to even stop at around 3120 level as discussed in the previous post.

If Yesterdays low got broken, check the M1 chart for signs of a strong rise. That will tell you that main intention is to reverse.

You should see this phenomenon somewhere around 20 - 35 minutes after NFP is released.

Normally between 10:30-12:00 EST is the best setups for trading in the New York session.

NFP is different, its usually about 20 minutes to 35 minutes after the news is released.

Yes, its correct,
Pay attention on how motion is reacting towards the pole. If its hanging around the pole it will break it.

If there is a strong rebound, then look for how it will react as it gets close to the center.

The outmost limits of the down move, if a scenario like I mentioned happens is the 127.2% price extension of 3180-3096, which is 3073.

So going down up to that level, you still could be faked into a short scenario, and price action can turn around and go upwards from there.

So 3073-3080 is the safest place to go long and below that its a fall downwards.

the above range can be played with a very tight stoploss of 7-10 pips

Here is an update:

Today, for those who bought at the lows of 3100, should have been a good day.

For price action to climb to 3310-3330 region, it needed to generate sufficient momentum to be ABOVE the red line.

Such momentum was not there, and we are hitting the old resistance at 3180 level again, which is a good sell zone.

There is another scenario shown by the dotted blue arrows where motion can climb upwards. In this scenario the blue straight trendline will be used as a launching pad, and the motion upwards will be quick and swift, ending somewhere at the median line in red close to the 3300 zone.

Right now we have a break of the T1 trendline, and as discussed earlier yesterday in the following post:

http://www.forexfactory.com/showthre...30#post5634330

The break is not authentic to dictate a trend change.

So we are back into the downtrend scenario again, with support at 3120 to look forward for.

We need the base of the black circle broken for a downtrend scenario, and this should not be a false break either. In a authentic break of the base of the black circle we will be landing on the T2 trendline.

The situation has to be reassessed at the end of today to see how the motion has completed its levels relative to the time constraint that was presented earlier:

http://www.forexfactory.com/showthre...08#post5635608

So far we have had a good rebound off the 3180 high of today. The authenticity of the move will fall upon the fact that whether the base of the black circle will be broken decisively.

No bounces to the 20% height or 33% (1/3) height of the diameter of the circle are accepted.

It has to be a clear thrust through the base of the circle

Here is a update on the current situation and the break of the black circle

FWIW

H4
Due to the break of the blue line, its important to wait aside and see whether the break is a retest of a previous support or it will be estabilished as a new support.

A range has not been established yet, which also implies that new support and resistance levels are yet to show themselves

Although the potential to retrace to the 78.6/88.6 retracement of the move from 2630 to 3489 exists, but unless some sort of a consolidation happens at a resistance level, its hard to find a good short position at the moment

M5
So far motion has been quite respectfull of the shown uptrend channels. This makes shorting this pair a bit dangerous at the moment. Also going long is risky too, because we are at a important previous support level (3050-3080).

At this point in the game, doing nothing and preserving capital is the best option.

There are few behaviours to look for shorting options, and one of them is a spike upwards past the dotted black line, followed by a rebound that in its initial stages will find resistance back along the dotted line. If you see this behaviour then short at the dotted black line.

The other behaviour would be a curved top around 3060 zone.

For buying options, you should look for support at 3025 level in between the area of the blue and red line.

Here is a update on the recent situation

Another Update...

here is the zoomed version of pin point entry

Here is the view from a time perspective

this is what i see now.

Here is the view, possible spike upwards due to time limitations.

Here is the more graphical view of the trendlines