A couple of events transpired. Moody's cut debt credit ratings on 6 European countries including 3 PIIGS nations in Italy, Spain and Portugal. U.K. and France on negative watch.
BOJ announced stimulus action and will purchase 10 trillion yen in JGB (bonds).
We saw EUR/USD drift down during Asian and form a BAJA bullish divergence on the 30-min chart.
Price now at session high of 1.3174, and bounced.
In view of upcoming 09:30 U.K. CPI and Moody's placement of U.K. on watch, EUR/USD may be effected by cross-correlation with EUR/GBP.
Resistance at 1.3186 as this is 38.2 retrace from yesterday's high, as well as 4/8th MML.
Current 74 level near Feb 10th pivot low and wide 50% fib.
Last edited by fxbaja; 02-14-2012 at 09:11 AM.
Eur/usd & eur/gbp
Chart 1 is EUR/US split-screen, with 30M session colors on left, and same 1H PSQ9 on right.
After 09:30 neutral U.K. CPI and surprise 10:00 EZ/German Zew, it looked as if market waited to short after the pop up. Peak was at Mars 135-degree 1.3213.
Negative 13:30 U.S. data only briefly stalled down turn, before pair revisited day's low. Lurkers trade bounce here.
Chart 2 EUR/GBP utilizes Keltner Channel (KC) and HAS MA T3 candles. The KC uses the ATR to calculate its outer bands. The ATR is based on volatility.
Pair emerged from the center line after the 09:30 data U.K. release, and continued its ascent thereafter. A 20-pip bounce off upper channel has taken place as we speak.
Here's a split-screen, with last posted chart on the right. We added MurreyMath1.0 indicator for horizontal S&R.
We inserted our 30-min chart with regular candles and KC on the left. The 09:30 and 13:30 data points are labeled with up arrows. The pair had sat on the mid-channel until 13:30 data.
We would wait it out, and price did indeed present the short opportunity. The 15:00 30-min candle hit the upper channel, which was also near the 3/8th MML.
Entry at open of 15:30 candle period .8395, with S/L just above 15:00 high of .8398, provide a highly leveraged and attractive R/R.
Mid-channel price and TP target = .8375 + spread/cushion = .8380.
Price hit TP during 16:00 period.
If you stay with the EUR/GBP 1-hour chart with HAS, we have an interesting tip.
After several red down candles during a down trend that does NOT have wicks on either sides (top and bottom) or wicks of minimal size:
the reversal is often signaled by a final red candle with wicks on both ends.
Here are some examples:
Jan 4th 17:00
Jan 9th 00:00
Jan 22nd 22:00 (Engulfed by previous candle)
Jan 24th 15:00 (Engulfed by previous candle)
Jan 25th 15:00
Jan 30th 14:00
Feb 9th 13:00
Feb 10th 14:00
Unfortunately, the oddity with the HAS (at this setting) is that it doesn't work with the blue "UP" candles.
There are wicks on the top side of ALL bull candles.
Settings we use:
MaMetod = 0
MaPeriod = 1
MaMetod2 = 3
MaPeriod2 = 2
Use with S&R.
Attached is EUR/USD Daily with AstroIndicator4 (A4). Settings are:
Body = 1
Body2 = 2
NatalDate = 01.01.1999
Everything else remains on default.
In "Common" tab, make sure box for "Allow DLL imports" is checked.
To filter out some of the bad signals, we used RSI(4-period) with 70/30 overbought/oversold levels.
We've done this before with this pair, and with Gold.
The A4, and these types on tools, do not indicate which direction price shall follow, but just the dates for turning points that can go in either direction.
That is why we use the RSI(4). When RSI(4) is 70 or higher, it's a SELL. When RSI(4) is 30 or lower, it's a BUY.
To see numbers for the A4 peaks and dips precisely, mouse over and look at the indicator's reading in the data window.
Here are the turning point dates:
June 1st *
Oct 13th *
The 2nd chart incorporates MurreyMath1.0 for S&R to assist in S/L placement, etc.
* Out of the 11 signals, only 2 had gains limited to one day. The balance had some run to them.
We're not mystical people, but are of open mind when we see results like this. This is not the holy grail, and needs support/confirmation by other tools.
We've used it with RSI(4) and MML, but each trader can work with what they like.
Note that the A4 projects into the future. However, with the loss of one day in each week (Saturday), the projected date for the next turn will be off by one day until the next Saturday elapses.
Last edited by fxbaja; 02-15-2012 at 05:58 AM. Reason: Saturday (not Sunday) is eliminated each week
EUR/USD Rev HAS and KC
We illustrated the reversal HAS candle on EUR/GBP.
Here is pic of EUR/USD 1-hour 20:00 reversal HAS candle, with pair operating within the Keltner Channel (KC).
The yellow fibs are based on plot High = 1.3312 and Low = 1.31546
The reversal HAS was at the 138.2 downside extension level. When we toggle on the candle wick, it shows probe slightly below to 1.3079, which would be a natural location for the S/L.
Entry at open of 21:00 = 1.3118 + spread = 1.3121 for the BUY position.
Price just hit the KC upper channel during the 05:00 candle period. This peak 1.3183 is also location of the 4/8th MML.
Reward = 62 Risk = 43
Ratio = 1.4:1
Usd/jpy apf ml
Here is a continuance of our USD/JPY chart where we identified the BUY Zone at the bottom between 3/8th MML price of 76.17 and previous significant low of 75.55.
We added interior fibs to the Andrew's Pitchfork (APF). Adherence to the APF was excellent, with a direct hit to the mid-channel Feb 9th. That was intersected by the 7/8th MML, and proved to be stout resistance.
This was broken when Bank of Japan announced its 10 trillion yen stimulus program. Price vaulted above the upper corner high of the APF and touched the Upper_ML2 fib.
Thus far, pair has risen 250 pips from the 3/8th MML. The safety net of Buying in the "intervention zone" allowed for higher leverage, etc.
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