Circular Trendlines

The current situation is a possible reversal within the next 100-120 pips to happen soon. Proceed with caution on any buy orders. if you are a weekly trader exit all your positions and stay out for a better buy position, and if you are a day trader then look for sell positions at highs of 3100 or lows of 3200 (if any).

I will be away for about a week till next Friday and wont be able to post on this thread until October 29th.

Thanks Kambooj. Enjoy the week.

Weekly
Resistance in price to proceed beyond the heavy black trendline is definetly forcing price action to go lower towards the blue trendline. This level is roughly around 2750, which is close to the 38.2 retracement of 2055 to 3170 (2740). We will be on a sell until then, with little chance of bouncing upwards towards and beyond 3200

Daily
The pressure off the south pole of the blue circle is a important point to consider since it has been trying to penetrate through that zone twice in the past (Sep 17 & Oct 17) with no success. The first major support on this time frame is the 2800 level which is denoted by the heavy black circle. Any solid break of the 2800 level will certainly open the window to 2700 level and beyond.

As to how much lower we will be going, it all depends on how the 2800 level will react. If we are in the 2780-2800 level before the Non Farm Payroll anouncement on Friday, then most probably we will drop lower to the 61.8 retracement of the 2055-3170 move which is 2500. This level can be derived also by observing that the dotted grey trendline on the weekly chart will be a important support if the blue line on the weekly chart is not respected.

H4
The solid heavy black circle is a important curve from which many bounces and penetration have happened in the past. It will be a important cuve where a support level has a high chance of happening.

Price action is currently hanging around the center of the blue circle, with tendency to slow down around that region. We can be witnessing a perimeter to perimeter move if the center is broken downwards, which will land us around the lows of 2700

After the lack of momentum to further pursue the 2800 level, price has returned to the 3000 level again.

This return cannot be taken lightly. The upward drive to 3000 will only happen if price action wants to rechallenge the base of the circle.

Price can form a strong spike upwards the south pole of the circle, penetrate it, but not have the energy to stay within the inside perimeter of the circle. It will then rebound downwards beyond the 2800 low. This is typical trend change behaviour.

If a downtrend was in place, we should have now been at the 2800 level. That mere fact alone implies that there is unfinished momentum in the upward direction that is still yet to come.

Expectations on this time frame is a spike up.

Here is the H4 chart:

Here is the view for today, with more potential upward movement to at least 3070 zone:

Strong reversal expected at 2940:

I'm keeping a close eye on this setup.

The movement upwards on October 30th from 2885 did not have the sustenance to go beyond 3020 level as thought before. The drop below this level on November 2nd has opened the potential to more than 1 possibility.

To start the analysis we go first to the weekly chart.

On the weekly chart the bounce off the heavy black resistance line has the potential to push down prices towards the black curve.to around 2450/2500 zone. At 2450/2500 2 things can happen.

There will be a rechallenge of the black line (T1), and in case of failure it would be catastrophic for the EUR since it will go below the blue line on the monthly chart towards 1.017 (First Scenario). The second scenario will be a move towards 3350/3450 level. The first scenario will not happen for the following reason:

From the drop on July 6 2008, every move upwards has been at least a 3 sectional move. On the lower time frames such as Daily we see a impulse wave (5 sectional move) from the low of 2039. The correction that has started from that level needs to either fall into a zig zag category, any triangle formation or a elliot wave flat formation. Neither of these have happened, so the room is still open for a potential move towards higher levels than 3200. The path chosen will be different towards this target. Please check daily chart for a possible path shown.

Also if we look at the contracting region on the weekly time frame encompassed by the blue lines, any motion that might go upwards or downwards must start somewhere within the vicinity of the median line going through the apex of the triangle. This is roughly around 3350-3500 zone.

At this point in time this formation is still not clear, but from what we see now it looks to be a contracting triangle.

On the daily chart after the rebound off the south pole of the black circle, the first support is around 2639-2650 level at the edge of the green circle. This roughly corresponds somewhere in between the 38.2 and 50 fibonacci level shown on the H4 chart. Given the fact that so far there is no subdivisions on the drop from 3020, chances are high that 38.2 level shown on the H4 chart will be broken. The last support level is around 2140 level, which is a fairly strong support, since we are hitting the base of the blue circle.

For now eyes are on the 2640 - 2700 level. Also note that a drop to 2460 level will create a head and shoulder scenario for a strong reversal upwards.

Hey Kambooj,

What do you think about a turn around for a bull run from 1.2735 area? It is a fib convergence on the daily chart: A 38.2% fib retrace from 1.2041 to 1.3171. And also a 61.8% fib retrace from 1.2466 to 1.3171. It is also today's S1 pivot.
Also from your 4hr chart in your last post it looks like it would be right on that 38.2% retrace point where it intersects with the ~45 degree line (grey, dashhed line that is parallel to the bottom dark black line of the channel).
It aslo looks like a gartley of the 1.2466 to 1.3171 Fib (SEE IMAGE BELOW).

It could very well be, the overlapping fib levels definetly will have some sort of a influence in slowing down the motion.

Too much hesitation is being observed now at the 2760-2790 level. A reversal sign will look like a strong spike down followed by a reversal in the opposite direction that travels at least a good 70-80 pips upwards without much hesitation

As long as we dont see this kind of reaction, we have to assume that we are going down and support after support will be broken.

Adding to the above

late october of 2008 and late october of 2011, there were some really hard reactions upwards.

The uncertain direction of this pair during the months of May 2011 to Aug 2011 definetly taught me a lot of lessons on never assuming a total trend change is taking place when the EUR was going down in June and July of 2011

Right now EUR is at 2804 with around 42 pip higher than its low of 2762. Its the third quarter of the moon, and H4 RSI(13) is pretty low. Lets see what sort of a reaction we will be getting. A continuous drive upwards can certainly put an end to this down move at a very supicious level of 2762.

So we will have to proceed with caution on our short positions.

time like this i got my vision
I put my bet on it

Will posted soon

Today is US Election day and battle between Obama and Romney. Market has moved very little since this morning. More market movement will resume later tonight when election results come out, and more tomorrow in the openning session of the EUR. But here is a heads up:

Hi bro
Thanks for the PM appreciated
I try to survive and getting the balance but need some more time.

Hope all going good with you.

I wait PA under 2750 to Long e/u

If price is contained within the area indicated by the purple ellipse and reaches the intersection of the two larger ellipses (arrow), expect a very strong reaction (which should yield some nice pips).

Agreed

Here is a update on the recent market movement that was triggered after the news of Obama winning the US Election:

Here is a closeup of the area (purple circle) which could contain price leading up into the Asian session later on.

(Update & Revision)

Potential target area and support in purple circle: