Yes Pip. Euro is really weak and it is a good time to dive in. I have gone back to my Cable roots for Day trading and have little concern for the Euro. I am watching Most the Sterling pairs to decide direction on Cable.
I do agree shorting the Euro is a great play. Still keeping my eye on the COT and Sterling positions increased by 3k last report, suggesting we could see 1.5600 according to the daily. It is a congestion area so volatility expected. The 1hr also shows a stron bull move out of 1.5400. Seeing the dominant trend is bullish then we are clearly seeing some weakness coming in as a result of some Dollar strength.
Sterling Yen confirms that the move was Sterling strength and if we consider all these facts then… Euro Sterling continues to press lower but the COT is showing a fall in short postions of 9k for the Euro, a huge reduction in open interest so I think we are at the bottom or close, the Euro will rebound. Waves do say 1.07 is the real buy area. So some life is left.
Sterling is under pressure some buying volume popped in on the 1H 13.00 NY start but it seems like we are in volatility. Buyers @1.5365. The EW ensured I played the short side from 1.5400. Still think Sterling will go up. I am closing my short trade as I write at 1.5380.
Hi Pip, I did trade cable intraday during the wk on the 1hr caught a nice short move but I didn’t catch the whole thing no. I did also do a GBPCAD trade and made +70 pips shorting sterling.
I was surprised that Cable tanked so fast so it appears we will see a big move up soon, the wave account is off, I think we have seen A correction I thought it would extend. It looks like we are seeing a B soon a C should come off. We shall see but intraday is working quite well for us at the moment so we are taking more short term positions. We are also short the Euro at the moment, this trade will account for a lot our gains this month I think.
Finally found a broker that offers a real vanilla options and not that bull@@@ binary nonsense. Actually can write and buy Put and Calls.
all being well, [B]I will go live with an NZD short AFTER Wednesday’s RBNZ’s rate decision[/B]: with a forecast for a rate hold or a cut there should be more bearishness for the NZD, [B]BUT YOU CAN NEVER KNOW[/B] how the market will react, so I will not sell the NZD until that event risk has gone past.
I have waited this long and a few more days will not kill me [B]says he, while digging his fingernails ever deeper into the desk and slightly foaming at the mouth[/B] :17:
First, we thought we should take a look at the longer term, monthly chart for perspective. If March closes down, that’ll be the ninth month in a row of lower prices. Even if you make the case that Greece is going to default, collapsing the European banking system and causing mass contagion, that doesn’t mean EURUSD has to be the “release valve.” Instead banks and bonds of Spain, Portugal, Italy and Greece should be the release valve, along with their currencies post-euro exit. I’m not saying the euro has to turn up now, but it’s worth noting the 20 month moving average is near 1.2800.
Our preferred thought is a bounce beginning not too much lower from here that retests broken support, now resistance near 1.2000. Then, after that bounce, another decline to break the lows set soon.
We’re nearing a wave v of (v) bottom, but it’s been elusive, and RSI is pinned to the floor. It’s not time to be a hero calling a bottom without a solid daily reversal bar. We’ll look to call that reversal bar, and if it’s in five waves, we’ll look to buy a dip, but this market’s downtrend has been relentless. Nonetheless, after 9 months in a row of lower prices, a bounce back towards larger scale resistance won’t come as a surprise to us. We’ll need to see a break of the sharpest down trendline to indicate that something to the upside is afoot.
RSI is telling an unmistakable story here too – new lows ahead. Will this be an ending type of a move, as we have it labelled, wave (v), or something worse? We’re betting on the former, but we’ll simply have to see how it plays out. A bounce back to the 1.5200 area is resistance (former support) while there should be a modicum of support at the former low 1.4951. Notice how both GBPUSD and EURUSD failed at structural resistance at the black horizontal lines. If the pound was in a larger rally wave, it most likely would have found support at the broken down tredline off of waves ii and iv of (iii), and the 1.5200 area which has been involved as both resistance and support in 2015.
We’ve adjusted the wave (iv) label in light of the fact that prices were unable to push above the channel. We like a bearish stance versus Friday’s high, since that would push prices up out of the channel, per the alternate count. Notice that short term RSI is in sustainable bearish territory, and daily RSI failed right at 50 – both signs that lower prices are coming. Look for a test of the lower channel line in the next week or two.
The failure of NZDUSD to reach the equality measurement at .7860, or even push past the wave a of (y) high is a truncation that carries a bearish message. There may be some brief support in the .7300 area, around the wave b of (w) low, but new lows seem to be in store. Notice that prices failed to reach the down trendline drawn off of last summer’s high. RSI is pinned lower here too suggesting lower prices targeting longer term support in the .66-.7000 area.
Here too there was a bit of dollar strength this week. USDJPY has been correlated with “risk on” lately, so its rally on Friday given a “risk off” environment is telling. We’re looking for prices to reach 124.36 which is the point where wave (5) would be equal to the largest point of wave (4) (The distance from (3) to A.). We’ll also look at critical near term support as Friday’s low, although it would take a drop below 118.62 to derail the current count.
Certainly the recent action looks like a sideways consolidation, more than a reversal. So, we’re going to move the alternate count to the top view. As long as prices remain below the wave d high, it’s possible that the wave (3) top is in place, but given the evidence elsewhere, it’s hard to doubt last week’s rally here. A break of Friday’s low, however, likely means that prices are headed to test longer term support near 1.2000.
Last week’s RSI divergence turned into a rout this week. As we’ve said before, the SNB is tough to trust the way it has handled the franc in the past several years, but which central bank isn’t? The near term trend is up, until it isn’t, although we’ll kindly stand aside until something actionable comes up.
It’s easy to want to ignore this pair after its odd looking wave pattern. What we can say is that the near term trend is up, and we think that the “peg top” is likely to provide some resistance. However, RSI has reached into the sustainable bullish zone, which suggests that any decline will be corrective. We’ll likely be sitting on the sidelines with respect to this pair until something truly actionable shows up.
Here too, a triangle has yielded to a new high. It seems that further gains are to come to complete the advance, as long as prices remain above 1.2616. There’s a small bearish divergence, but that can safely be ignored, especially while prices are in the short term channel. The advance may prove to be limited, although without any sign of a reversal we’d be inclined to stick with the trend.
We sent a Tweet out this week about the clear three wave decline for wave (iv). We’re aggressively bullish against that low…did I mention aggressively? We have a clear triangle for wave (4), even if it’s not exactly clear how wave E developed. It’s either as depicted on the top count, or it ended at 118.43 and wave (ii) ended where we have the wave (4) label. Either way, a new high above 122.03 is in store. The 100% expansion of the wave (iv) decline yields a target of 123.39, which makes a nice target. The apex of the prior fourth wave triangle is at 124.14, which also makes a nice target. Certainly if the current advance is only wave 1 of (5) prices will exceed that level, but that’s a discussion for another week.
The most prominent feature on this week’s chart for NZDUSD is Wednesday’s key reversal from support. One can argue that there’s five waves up on an hourly basis from this week’s low as well. That leaves the idea of a larger B wave on the table. Of course, the market has other options too. There’s the outright collapse scenario where wave C is going to be equal to wave A. And, then there’s the count of W, X, Y down from the all-time high. The fact that RSI dipped into sustainable bear territory prior to Wednesday’s reversal supports the bearish counts. In a situation where multiple counts are possible, it pays to be nimble, or look for opportunities elsewhere.
There’s only three waves down from the wave (iv) high at this point, so there needs to be slightly lower prices before a larger bounce. Short term, we’re looking for the wave i of (v) to cap prices prior to a final low. Will prices reach the lower band of the channel? It’s hard to say, but that seems to be a stretch at the moment. A push above the trend channel would be a change in behavior, and it would suggest that the wave A low was in place.
The longer term view in the pound also suggests that a five wave decline is coming to an end. But, there’s nothing to indicate that a low is in place, quite the contrary. With the break of long term support from the 2010 low, there’s no structural support until 1.4227. We’re not interested in playing anything counter trend until a reversal is seen. In fact, as long as prices remain beneath the black down trendline, its hard to imagine anything but a temporary reprieve has been seen. Bears are firmly in control until a reversal day is seen.
From a shorter term perspective, the decline from the wave 4 high isn’t complete. There are some minor bullish divergences, but they are coming from sustainable bear territory. At a minimum, we’ll need to see prices push above the steep down trendline, and ideally back above the wave 3 low to suggest that support at 1.4813 is going to act on prices. A sharp rally into 1.4800 followed by an ending diagonal would be ideal to complete the decline.
