2007-07-31

2 hours chart of EUR/USD shows something like megaphon pattern (or reversed triangle if you prefere). However, it is declining, rather simetrical and I am not sure what it means.

With pink is marked the old parallel channel. It was broken yesterday in the night.

At least the "megaphone" gives us a target ~1.35.25.
Updated M3

http://www.safehaven.com/article-8083.htm

Our friend Chaves do 70%, nice...
JUL-2007 - 120% *
YTD - about 269%
EUR/USD YTD - 1.19 - 1.37 = ~15%
YTD ALPHA - 169 - 15 = 254%


* Currently I have open positions and I may (or may not) loss lots of money,
this probably will happen tomorrow, and probably will wipe out 20-30% of my profit.

* From other side, I will receive an award, because I am third best performing trader in the broker company I use, which will elevate my profit with about 5%.

:o)


Update 01.aug.2007 - after closing the mentioned positions, the profit is 157%.
However this will calculated in this month.
Today is such a boring and lazy day for the forex market...
The channel from yesterday was broken. EUR/USD then reached 1.37.28.

Anyway the analysis is still valid, and USD index still testing the support - little bit bounced, but still more to go.

2007-07-29

This week the fall in EUR/USD began.

I. Wedge in USD index and EUR index:

USD index:
The raise of USD bring back the USD index inside the wedge. Currently it will raise to the upper boundary. Then, it could break upper boundary (resistance), or fall again to the support.

EUR index:
EUR index is oposite of USD index, and falling. Currently old high from April act as a support, but it will be broken soon. Fall will go to the support and then support will be broken, or raise will begin to the upper boundary (resistance) again.

III. Wedge in EUR/USD:

3 days chart:
3 days chart is similar to weekly chart. Currently price fall, and is near 50% fall (according the wedge). The fall will continue to the support level.

As I said, the support may hold or may be broken (because wedge is bearish pattern).

16 hours chart:
Here, you can see the different supports that may be in play during the fall...

1 hour chart:
This chart is shown in order to see the parallel channel in which EUR/USD falling down. It means that even if we see 1.37.20, the fall will continue.

IV. Summary:

EUR/USD will fall first to about 1.36.10, and later to about 1.34.

Caution is warranted :-)

Happy trading :-)

V. AUD/JPY watch:

AUD/JPY fall off the wedge. The support levels are with brown. Since overnight interest is really high, stay aside for now. Because of same reason we may be will skip these analysis next 2-3 weeks until AUD begin raise again.

2007-07-27

Resistance (formal support) is broken.

Next? Re-test the broken resistance (buying oportunity).

Then - The resistance of the old bottom is in play (pink line).
Bounced back...
100 - 150 EUR more (depends of calculation), and we will hit 200% profit :-)
Now it will go to 1.36.90 area, then back to ~1.27.50.
It could alredy went to the support, because 1.36.93 was hit.
Do not enter long :-)

2007-07-26

EUR/USD - 1.37.70

The 50% Fibonacci level was just hit, and at least for now dollar raising slowly again,
Currently is ~1.38.55, which is guess what - 38.2% :)
Some said this will be easy... :-)

2007-07-25

Today we had major drop in EUR. Is not only against USD, but against most of the other currencies too.

EUR/USD was 1.36.97.

It could be one-day wonder, we saw several times 1.37.60, before
...or...
The major leg down may begin...

We miss this move :-) This is why we going now to to do this middleweek issue.




I. Wedge in USD index:

Situation is complex now. Currently USD index raised, and now, is a time to "meet" the formal support. It could drop back from it. This will be good buying oportunity, especialy for traders like us :-)

However, is possible the wedge to be "missunderstood", and to be like on the picture.

Pink is where most technicians think the wedge is,
and brown is the new estimation.



II. Wedge in EUR/USD:

3 days chart:
As EUR began to fall, this means the wedge is done. EUR/USD will fall to about ~1.34. Now there may be a pullback, where we need to enter short.

8 hours chart:
On 8 hours chart we have several trendlines. Blue channel is broken as at clock.

Brown channel is in tact. Pink line is probably the most important. It is parallel to brown channek, is formal resistance, then acted as support. Today this line acted as support again.

Now EUR should rise. How much - I do not know. Only way to estimate (but is still speculations) are the Fibonaci levels:

Levels are 1.37.90 / 75 / 55.

I have feeling we will see 1.38.00 tomorrow, so be prepared :-)


III. Summary:
(this is not a trading advice)

Be prepared to enter short against the EUR.

Unfortunately the level is unclear.

Probably, best way is to enter @ current levels 1.38.10-1.38.20. However I am not going to do this, but rather will wait till tomorrow.

Happy trading :)
EUR/USD just hit - 1.37.04.

Is the down leg begin?
If yes, then we need to enter short,
If no, any short entering will cause immediate margin call.

This evening I will check the technicals and will do middleweek EUR/USD update.
Some notes:
The support from previous major top is near - horizontal brown line.

The raising intermediate support (blue) is near too.

With pink is a line parallel to the intermediate support. Is broken, but it could, or could not be support.

Yellow line, is resistance line. It is NOT parallel to intermediate support.
Well, now it hapened :)

Now we need to see if previous support could act as resistance, so to be able to enter short again.

Since I am writting this, EUR/USD is 1.37.33/37.

This is still a good short entering, but I will wait a little. Who knows...
Nothing significant happend yet. USD is still in the range.

2007-07-24


This is old, from yesterday, but is soo gooooood,
May be Ron Paul is the only one in US Congress who understand the situation :)
Quick charts Wedge in EUR/USD is completed now, with recent hit of 1.38.51...

USD index - may be support is not as we thought (pink), but is little bit lower (brown).
Deja Vu Again :-)
EUR/USD just hit new high - 1.38.51.
Now the wedge MUST be satisfy, will check and post later.

2007-07-23

There are nothing special for this chart.
I am posting it, just because it shows very good the long term support @80th area.

2007-07-21

Another good week :-)

This week was very interesting too.
EUR/USD hit new high - 1.38.42.
The EUR/USD bears made money, the bulls made money too. We hit 100% profit, then we had some lost (unclosed), so profit now is about 90-95% (could be less).

I. Wedge in USD index.

USD index forming a wedge, and broke below support level. I think this is false break and USD index will bounce very soon from the support, see the EUR index and EUR/USD below.

II. EUR (XEU) watch.

The EUR index forming a wedge. Because USD index is dominated by EUR currency and EUR index is dominated by USD currency, this wedge is corresponding to the wedge in USD index. In fact chart is almost opposite.

It still not reached the resistance yet. However, it is too close to the resistance, so it may begin to fall any moment now.

The ratio between EUR index / USD index shows same wedge again. The wedge is completed, and fall may start any moment.

III. Wedge watch in EUR/USD.

EUR/USD 4 days chart:

This chart is similar to weekly chart. There are same wedge. The wedge is not completed. However, EUR/USD hit new high - 1.38.42. This is probably enough for the wedge, and now price must begin fall to the target price of 1.34.00.

EUR/USD 8h chart:

A rising channel, but resistance is just above (not shown)


IV. Summary.

EUR/USD will begin to fall.

Check previous week EUR/USD view here, because the situation remains the same.


V. AUD/JPY watch.

AUD/JPY went to upper boundary of the wedge, and currently dropping to ~105.60. Probably it will bounce from the support.

Is too expensive to play against AUD, and now we need to wait the fall, and then we need to check if is too risky to play the raise of AUD.


Happy week and happy trading :-)

2007-07-20

Deja Vu :-)
EUR/USD just hit new high - 1.38.42.
Could it be the top?
Yesterday, I conducted following AUD/JPY "carry trade" experiment - real money, but educational purpose :)

In 23:55, I bought 200,000.00 AUD/selling ~21,512,000 JPY.
For the operation, my broker blocked ~1,276.00 EUR from my account.

In the midnight, I received carry trade interest of 2,520 JPY.
This is 23.42 AUD or 14.94 EUR, or 1.17 % of the blocked money for 1 day only.

Later on, I closed the possition, and I had my ~1,276.00 EUR unblocked.

2007-07-19

Today we hit 100% profit for this month :-)
We will see if we will be able to kept it till end of the month...
4 hours chart EUR/USD

2007-07-18


Unfortunately for us, upper channel in EUR/USD is still in tact,
However, we are in the upper part (resistance) of the wedge (not shown on the chart, and still 10-15 pips to there), so final "real" decline must really start soon.
One very important scenario, with very small probability, but...

What if the support is really broken,

And we see test of old support... which is resistance now?


USD index reversing...
Today, 2007-07-18 @ 04:43:03 GMT,
EUR/USD just hit new high - 1.38.37.
Could it be the top?

2007-07-17

Some observations...


The short term (pink) channel is broken now. We need to see if EUR will broke the "middle" term channel (blue).

Until the EUR is in the middle term channel, we may expect raise to 1.38.50.

As I am usually impassioned, I will begin build position soon.


2007-07-18 11:44

This analysis is INVALID now...

However, we built good possition and already close it :)
Nice interview with Ron Paul with Google executive:

http://jeremyhermanns.org/politics/candidatesgoogle-ron-paul-tha-man/

a must see


2007-07-16

New low, then quick rebound...
(probably because of GBP)

2007-07-14

For EUR/USD expanded weekly view - click here




A raising wedge, currently it going to the upper boundary. After such bearish wedges, we have BIG FALL :)

I wrote:
I WILL NOT PLAY THIS, since, the range is very close ~ 2 cents (104.50 - 106.50).

Now, it looks like the wedge is not so thin, and the yellow mark show what were good buying opportunity, which we missed because traded heavy EUR/USD. Nice strategy would be to wait for such drop next days and to enter.
What a week!

Week ago, I thought the current raise will be for 2-3 weeks or more, but it happen for just 3-4 days. I expected gains, but never expected that much gains for just one week. We did about 75% profit from the beginning of the week. We will see if we will be able to keep this profit till end of the month.


I. Wedge in USD and EUR index.

The wedge is reversal pattern. In our case is bullish for USD index and USD as a currency, and bearish for EUR index and EUR as a currency. However, the wedge in our case, is more than year and half long (from JAN.2006).

The USD index wedge is completed. Even more - support is broken. The break is also because of raise of the Japan currency - JPY. I believe this is false break, because as we will see later, the wedge is not completed in EUR index, and in EUR/USD.

This is 15 min chart of USD index. We have a downtrend channel now, and index could go eight er up or down to the channel. I believe (e.g. not estimated), that the upper boundary correspond to about EUR/USD = 1.37.60.

II. EUR (XEU) watch.

Now, is very important to see EUR index. Here, as usual, we have corresponding wedge, but it is not completed. Note the orange mark around JAN.2007. I believe, is important, because, there the index did not fell to the support level, the price bounced little bit above the support.

To make even more clear picture, let see EUR index/USD index.
Here we may speculate if the wedge is broken or not. Everything depends how we draw the trend line. I will consider, that the resistance line is not broken, but price is on the line.


III. Triangle and wedge watch in EUR/USD.

EUR/USD 4 days chart:

The chart is similar to 1 week chart.

[o]. triangle.

The triangle from last week is broken now. There is really nothing else to say about it.

[o]. wedge.

Here we can see the wedge. The wedge NOT COMPLETED. What we have in Friday, was max of 1.38.12, then market close negative, with small loss for a day. Friend of mine said - "So what happend today? Nothing happend!". I do not know If I should agree or not... Here some observations.

With orange color, is marked how twice the price did not go to the support level.

[o]. candlestick patterns

I never use candlestick patterns, but now, we have one, which may be is important - the small doji candle, is something from following:
  • bear star.
  • bear harami.
  • evening star forming - we will know this tomorrow after market close (e.g. Thursday morning)
I can not decide is it star or harami, because I can not "see" where exactly the "open" is.

So if we have bear star, this is warning pattern, which means that market has no momentum left. Then usually, but not always a decline coming.

If is harami, which I do not think so, means decline will come.

In case is evening star - decline will come, but before it, we need to have confirmation. We will have such Thursday morning.

[o]. Indicators such RSI and MACD

they are bearish, I think. There are bearish divergence in RSI and MACD (not shown).

[o]. 4 hours chart.

OK, we have parallel rising channel in blue.

The triangle bottom, as well the long term support is @ ~1.33.95 (from now one, I will refer it as 1.34).

We also have a channel inside the channel - pink.


IV. Summary or ... What now?

What now? - this is what I am asking myself since friday, when I sold my last large possition, and price hit 1.38.12.

Lets sumarize.

  • In the wedge of USD index and EUR/USD, we saw several occasions, when the price do not go to the support level. This means, that this time, it could not go to 1.38.50.
  • There are lot of short positions on EUR right now. In the broker house which I use, currently I am the person with maximum profit for the month. This is strange, since we have always traders who do 100-200% each month. But not now.
  • When we go to the support of long time USD index wedge, we need to go to the resistance again. The wedge exists from JAN.2006, so is prooven support.
  • One weak argument - EUR can not go that high :) . It could do throwover, but nothing else.
I believe EUR will begain to fall next week.

[o]. Should we need to enter the market and to use those final 40 pips to 1.38.50?

On 4 hours chart, we have short term channel in pink. I believe the price will go there, at least Monday. In case you like risk, you may enter 1.37.60, but with small ammound of money, and try to play 1.38.50, but you defenetly must use protective stop (floating stop is the best).

If the price fall to 1.36.90, this doesnt mean fall of euro, because we are still in upper channel (blue).

I believe the risk now is too big for this. As I wrote - a lottary.

[o]. When we will be able to short EUR?

I always said - do not short euro. Well this time, I think we should, but we need to be sure it will go down. This confirmation we will have when we had "eveningstar" candlestick pattern, or if the price fell to 1.36.80, and broke down from blue channel.

I will monitor this closely and will post in my blog when/if this happen.

V. Summary of the summery :)

Watch levels 1.37.60 and 1.36.80


Happy week, and Happy trading :)

AUD/JPY will be posted in different post

2007-07-13

The point where lottary begins... :-)

On weekly chart, we are now almost on the resistance level. Today top of 1.38.12, suggest we are on the very edge of the wedge :)

From now one, we have just 40 pips (or less to ~1.38.50) from what must be the top. In same time, USD index in below very important support.

Now, is (probably) too late for enter, due to high risk, and is too early to short :)

Advice is to stay aside and wait for 2-3 days. Then we may see if we can be able to enter again, because if now price fall to let say, 1.37.65, this could means that we will not see 1.38 again for some time :-)

In this week EUR/USD view, we will try to find entry point for shorting, also will speculate what may happen in near future.
USD index chart.

Incredible, but true - support is broken!?!?! This can be normal - a throwover...


USD index 15 min chart (I think :)

Attached to see that we are NOT at the "very" bottom...


Finally, the XEU (EUR) index chart.

We are not on the wedge resistance (yet). But we are very close to it. We may expect throwover, but I will not rely on it.

With orange, I marked two times, where the XEU go to the support of the wedge, without touching it. So is possible to have something like this now.


Currently I have open possitions. If they are closed, and EUR/USD price go to 1.38.05, I will consider the rally to be finished, and will stay aside.

In case the possiton is closed and we do not see 1.38.05, I will try to find enter point again @ ~ 1.37.65, but only if meanwhile price stay under 1.38.05.

Happy trading...

2007-07-12

http://www.safehaven.com/article-7933.htm

Contain M3 figures for lot of countries...

Then people will say, why inflation is so big...

GLOBAL MONEY SUPPLY
as of 07/09/07 CountryYOY %
Russian Fed. M250.94
India M319.70
China M216.74
Australia M314.05
United Kingdom M413.84
Mexico M412.21
Brazil M211.92
Denmark M310.62
Korea M310.07
Canada M38.08
OECD Total M3/ EUROZONE7.86/10.9
United States M3 reconstructed13.7
Germany M36.16
Quick estimations...

4 hour chart:
we have a parallel channel - brown lines.
The wedge is with blue lines.
Pink line - short term support.

There are still a chance the price to fall to bottom of the parallel channel (brown), this will be nice, very nice.

There is slight chance the price to fall to bottom of the wedge - not good, but we will see.

IN CASE PRICE REACH 1.38.05, I will consider the rally for over, and will delete all my orders.


30 min chart:

Same picture. Just magnified. There are a small resistance - brown, which is passed, but not quite much, trere is a chance for poolback.


USD index...
We had veri small rice there, probabal guess - because of JPY (still not checked how Yenn doing now), but still is on the wedge support.


EUR index...

*will come later with the update*