Ok, so my first bit of analysis i'd like to throw in..
My current bias for my two traded pairs - the cable and the fiber, is currently bullish.. We are coming down after quite a heavy sell off and but i have reason to believe we'll be looking for higher prices..
Cable - Left
USDx - Center
Fiber - Right
As clearly shown above, there is a strong bullish SMT divergence that had occurred last week which saw the Euro take out a significant Monthly low. The lower low shown in the fiber, is represented as the higher in the the USDx - showing the correlation intact. The cable however failed to make the same lower low indicating there was accumulation taking place..
As well as this, in terms of market structure, the daily chart of the cable above i have tried to illustrate what looks to be like a longer term fractal posting on the daily chart.. Represented with a intermediate term low, a longer term low, and another intermediate term low which indicates bullish market structure in the longer term..
At the same time this has been happening, the cable was also approaching its OTE on the daily chart - with all other factors in place, it was a good catalyst for a bounce which we had seen on Friday and a continuation into today..
Market flow remains bearish on the daily charts of both the cable and the fiber until the respective highs are taken out at 1.2330, and 1.5720 - which i am looking to happen.. 4H market flow is currently bullish in line with what i believe will be an up trend for the near future at least..
This coupled with the fact that seasonal tendencies show that the British pound shows weakness in July and posts a significant high leads me to my bullish bias in the market..
So for this week, i will be looking for long entries only.. There has been quite a nice buy rally up today in both the cable and fiber and i feel we may have already posted our lows for the week.. Tomorrow's action will make this a little more clearer..
I'll update later in the week if any setups play out like i had planned and what the result of the trade was...
Last edited by SanJ; 07-16-2012 at 05:51 PM.
It's 10% What Happens.. And 90% How You React To It...