Comment by Haitham653 on October 16, 2012 at 6:12am

Just wanna clarify few things, above 1.3000 we have 2 sloping resistance lines, the first one comes through 1.3171 and 1.3070, the second one is the most important , it comes through 1.4939 high of May 2011 and 1.4548 high of Aug 2011 !!!

Anyway, breaking above 1.2991 is not necessary for strong gains, I think the first challenge would come around 1.3052, stability above this level with daily close would threat 1.3212..

The second line that comes from 1.4939, protects the consolidation from 1.4939 in medium term ,a clear break above the second sloping line followed by a daily close above 1.3212 would target 1.3500 levels and might end the consolidation from 1.4939, this scenario suggests that the EURO trades at crossroad now !!!

However, I believe that miracles sometimes happen these days, but the smart question why the EURO would go beyond 1.3200 levels !!!

I think this big balloon because of U.S elections , once It's finished  and Obama wins I think things will back to normal !!!

Comment by Peter jcp on October 16, 2012 at 6:40am

Morning Haitham - Yes i would agree that to see the 2011 EU prices of 1.4939 and 4548 might not be foreseeable again in this last quarter or 2013. But just up to a 50% Fib retrace staying in a downtrend can show over 1.3400.

So why not rule out extremes as the US as far more problems to be leaked during this next 6 months and say a working range of 2500 to 3300. Then the market makers can keep buying whilst the majority of traders see under 2000 and then they can get back to selling when the Eu price creeps up to high ;-)

Also remember the GU on the UK election day moved about 600 pips and the GY over 1000 pips in one day. So we never know in early November with the US Election we might see 3400 and 2500 in a week - you just never know - ( that would be a fun trading week)

For now the EU is teasing just below 1.3000 at 2995 - slightly above the previous 2991/3 area. It is OB again on small frames - not that it could not try 3020-40 area during the day quite easily.

Have a good day and look forward to November's trading 

Regards 

Peter

Comment by Haitham653 on October 16, 2012 at 6:43am

Fundamental focus today is on:

1- German ZEW Economic Sentiment : at 09:00 AM GMT , Previous : -18.2 , this indicator is published based on a survey of investors and institutional analysts, Above 0.0 indicates optimism, below indicates pessimism, however , this indicator can be an early signal of future economic activity !

2- Consumer Price Index (CPI)/ U.S : at 12:30 PM ,Previous: 0.1% , It shows change in the price of goods and services purchased by consumers, excluding food and energy, It also represents consumer prices for the majority of overall inflation! any gains would be good for USD , expectations for today :0.2% !!

Comment by Haitham653 on October 16, 2012 at 7:06am

Morning Peter 

Yes I agree with you , breaking above 1.3200 is not necessary for breaking above 1.3500 levels, the pair might test 1.3400 then pullback to 1.3000 , anyway some analysts say that the euro would range between 1.2600/1.3400 the next few coming months and the first half of 2013 !!

I don't buy it but it might happen, nothing is impossible !!! 

If the pair breaks above 1.3200 and fails to break above 1.3500 and back again below 1.3200 , yes It might test 1.2600 once again , technically this scenario can easily happen !!!

Regards

Haitham  

Comment by Romano on October 16, 2012 at 8:03am

Well, at least we seem to gonna hit that 3025 I said before, its very close now

Comment by Peter jcp on October 16, 2012 at 8:12am

Hi Romano - yes I think that down trend line barrier at 3020-30 area is on- even though we are way OB on smaller frames. Above 2991 for me and its on and even then if the market makers let it pullback lower for 2-4 hrs - that can get rid of the OB's - ie Bulls taking profits - Bears back selling and then they can step in again and try even above 3030 - if they want to ;-))

Comment by Haitham653 on October 16, 2012 at 8:25am

According to H1 chart, the pair is rising with low momentum, any move above 1.3000 most likely will be to limited by 1.3052, a clear break above this level would challenge 1.3200 levels !! 

A rejection from 1.2991 with 4 hour close below this level might threat 1.2890 levels !!

Comment by Haitham653 on October 16, 2012 at 9:00am

According to H1 RSI , we're in extended bearish divergence- bullish reversal in short term - this scenario suggests more gains before possible - final topping - you need to keep an eye on 1.2991, stability above this level would keep pushing upward, below 1.2991 the bullish momentum is weak...

Anyway, H1 RSI break below 30 would confirm the last top and would reverse the pair to downside !!!

  

Comment by Haitham653 on October 16, 2012 at 9:15am

This chart shows how extended bearish divergence works :

An hourly close below 1.2890 followed by RSI break below 30 would completely eliminate the bullish phase !!! 

Comment by Peter jcp on October 16, 2012 at 9:22am

I like your 1 hr chart Haitham - but think today there are enough supports above 2890 - at 2920-40 50 etc that would keep it above your up trend line. If we don't break under 2960 - i think its more goes back up - as this fall is really a bull stop hunt ;-))

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