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Using Fibonacci ratios to manage your trades efficiently
by Sunil Mangwani
November 23, 10:00 GMT
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EUR/USD is in an important intraday level. The price can turn around if the price breaks the trendline and keep going downside or the price can reject the ascending trenline and continue the upside move. Watch out for the reaction.
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“Be contented when you have got all you want”
Holbrook Jackson
My personal touch: When you have got your target, take it and run away, don’t be greedy and try to get more profit because you can end up with nothing and that’s very frustrating…
Update: For all of you that didn’t close the position in EUR/USD at 1.3300, we have the next resistance level at 1.3350, 38,2% Fib. Retracement from the previous leg down. Read more…
Today the window between Frankfurt and London opening was tricky, but just after the London opening we got the following opportunity:
- MACD Divergence in 60m (See yesterday’s article)
- Price approaching to 5m ascending trendline. (Upside move)
- Doji candle just after 7:00 GMT (London Open)
- First entry opportunity after candle formation (aggressive)
- Price reverse and breaks the Trendline connecting the previous swing highs (Second entry opportunity)
- Price bounces touching the Trendline (Best entry opportunity, stop below previous swing low)
- Profit taking getting closer to 00.
Peter Mandelson (UK Secretary of Business): This is a very important historic moment for the global economy. (About the G 20 meeting agenda)
Source: CNBC
Over the past 24 hours, it has become increasingly clear that the bear market rally in currencies and equities is over. U.S. stocks plummeted close to 4 percent sending investors back into the safety of the U.S. dollar and Japanese Yen. Renewed concerns about the U.S. economy was the primary catalyst for the risk aversion but repatriation also added to the upside pressure in the two lowest yielding currencies. With 24 hours to go before the end of the quarter for most U.S. companies and the end of the fiscal year for the Japanese, repatriation has been particularly strong as companies bring money home to window dress their balance sheets. The U.S. dollar strengthened against every major currency except for the Japanese Yen.
Is the Bear Market Rally Over ?
The close to 25 percent rally in the S&P 500 between March 6th and March 26th has been impressive. However, the size of the move was right in line with the previous relief rallies during the Great Depression. If you recall, the catalyst for the rally was a few pieces of better than expected economic data, the Federal Reserve’s decision to start buying longer term U.S. Treasuries and more details from the Obama Administration on the Public Private Investment Program.
Source: FX360.com
Read more…
Today there we have got a light economic calendar.
In the European session at 9:00 GMT CPI Flash estimate. This event can move the market and it’s considered High Impact.
At 12:30 GMT CAD GDP
At 14:00 USD Consumer Confidence. This release is dropping his popularity and we don’t see big moves lately.
At 23:50 JPY Tankan Large Manufacturing Index. High Impact.
| 08:30 | United Kingdom | Index of Services (Jan) |  |
-1.0% | -0.9% |  |
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| 09:00 | European Monetary Union | Consumer Price Index (MoM) (Mar) |  |
0.4% |  |
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| 09:00 | European Monetary Union | Consumer Price Index (YoY) (Mar) | |
0.7% | 1.2% | |
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| 12:30 | Canada | Gross Domestic Product (MoM) (Jan) | |
-0.6% | -1.0% | |
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| 12:30 | Canada | Industrial Product Price (MoM) (Feb) | |
0.5% | -0.1% | |
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| 13:00 | United States | S&P/Case-Shiller Home Price Indices (Jan) | |
-18.5% | -18.5% | |
||
| 13:45 | United States | Chicago Purchasing Managers’ Index (Mar) | |
35.0 | 34.2 | |
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| 14:00 | United States | Consumer Confidence (Mar) | |
25.9 | 25.0 | |
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| 21:00 | United States | ABC/Washington Post Consumer Confidence (Mar 29) | |
-49 | |
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| 23:50 | Japan | Tankan Large All Industry Capex (1Q) | |
-12.0% | -0.2% | |
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| 23:50 | Japan | Tankan Large Manufacturing Index (1Q) | |
-54 | -24 | |
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| 23:50 | Japan | Tankan Large Manufacturing Outlook (1Q) | |
-51 | -36 | |
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| 23:50 | Japan | Tankan Non - Manufacturing Index (1Q) | |
-25 | -9 | |
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| 23:50 | Japan | Tankan Non - Manufacturing Outlook (1Q) | |
-25 | -14 | |
This is a quick review about how EUR/USD, GBP/USD and spot Gold look like:
Sellers failed to break below 1.4110 which has seen buyers return to the market and they have pushed this higher to its 38% short term and longer-term fibs at 1.4347 and 1.4352 respectively. This is why there has been profit taking around here and also some fresh sellers have possibly entered at these higher levels.
So this will be the level to watch today. If the make can push through this resistance you should find sellers turning around to join buyers which should help to push the market higher with 1.4425/50 looking to entice. Once more profit taking is expected here. This should be quite a difficult area to break first attempt and sellers are expected to take advantage of any rallies to here to re-establish their positions.
1.4110 is the level to watch on the downside. Failure to hold this area sees sellers reemerge and this is expected then to trade lower with 1.4080 your immediate target. A loss through 1.4080 sees sellers once more take control with 1.3965/40 the targeted area.
Euros came lower yesterday, but failed to break through to 1.3070 holding above 1.3110. There has been a bit of a bounce this morning back to 1.3275 and there is resistance at these higher levels through to 1.3295. There should be sellers waiting around these higher levels looking to push this lower again through to 1.3125/10 once more.
Now if the market fails to break lower and holds the 1.3200/1.3175 region buyers should re-emerge and push this higher once more. At 1.3270/95 there will be a bit of a struggle as to who takes control, but if this can go above 1.3290 the buyers would have won the day which should then push the market higher with 1.3317/22 your short term target. Profit taking is expected at these higher levels, but once 1.3325 is out of the way fresh buying should enter the market which is then expected to push this higher for 1.3386 to 1.3414.
Below 1.3110 negates moves higher and leads the market lower through to 1.3070 initially. Fresh sellers will appear if below 1.3070 as the market should then come lower with 1.2940/30 then your short term objective.
Gold fell lower yesterday, breaking below 915 for 909. Now there has been a little recovery today, but resistance is above from the 25% fib level of 920. You should see some selling pressure at these higher levels, with another assault on support located between 911 and 909.
Profit taking is expected at these lower levels thus support should hold. It is only below 909 that fresh selling will appear with 891 looking vulnerable to assault.
However if the market does manage to break back above 920 you should see the buyers take control and lead this higher for 930/31. At these higher levels profit taking should halt initial attempt. Buyers would be expected once more if the market broke over 931. You would then have a target zone of 941 to 946.
Source: FxStreet and Charmer Charts.com
