A-B-C-D Trade - page 276
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The hit to the TP at the MML level was during the 04:00 candle on the 4-hour, and at 07:00 on the 15-min.
As the European session is closing now, let's review the EUR/USD activity.
Price was cautious from the bottom after opening the week with a gap down, and through the U.S. holiday. It walked up the lower fork of our Andrew's Pitchfork (APF) plot. The 3 points of the plot were easy to see.
The Wolfe Wave (WW) 1-3 trendline was also support. Note that if you use the WW indicator we provided, it would have changed its plot by now. Therefore, you can manually draw trendlines to duplicate the original plot, before it changes.
The Jan 13th low of 1.26229 held. The first take-profit (TP) level on this swing trade opportunity was identified at the MurreyMah1.0 (MML) 1.27564, which was hit during the 07:00 hour. On the 1-hour chart, this level was the 1/8th MML.
The next TP was the APF's middle fork, which of course slopes upward. This was reached during the 10:00 period. When we drop down to the 15-min or 30-min, we can see how that was respected as resistance.
The 4-hour usually has larger intervals on the MML. The 1-hour level provided additional MML levels halfway betweeen the 4-hour intervals.
The 10:00 was a peak due to high-impact EU data release. 2 out of the 3 metrics were negative Euro, and we saw a decline. Therefore, the point was to exit prior to 10:00, as we have advocated - unless you are willing to take the risk. Small day trade stop-loss amounts usually are vulnerable.
When we look at the chart using GannSQ9 indicator, make a fib plot from bottom 1.26229 to the 90-degree of 1.27357, the top was at the 161.8 extension of 1.28055.
The decline from that top rested back at the previous congestion area, and support level of about 1.27213. This is also the 38.2 fib from plot using that massive move on Jan 13th.
Some of the decline may have been attributed to caution ahead of the U.S. session, its first since the Friday after-market credit downgrades on France and other Euro Zone nations (as Monday was a holiday). The bailout fund downgrade followed on Monday.
Attached are the WW and APF plots on the 1-hour, where we can see the smaller candles, entry, and TP1 & TP2 points.
We haven't featured a fibo fan plot for some time, so here is one that is a bit unusual.
EUR/JPY 1-hour. Plot High = Jan 13th 06:00 98.80 Low = Jan 16th 22:00 97.14
This was done to align the plot's high with yesterday's peak, to form a trendline that was just hit during the 07:00 candle period. This level also 78.2 retrace.
We also had BAJA bearish divergence with that 2nd peak coming in at a lower RSI(4) reading that 1st peak of 03:00.
Can trade back to 2/8th MML/38.2% fib.
Chart 1 is a zoom in on this same pair with the fibo fan plot, except we went down to the 30-min interval to get more MML levels.
We diagrammed the SELL at the 78.6 fan ray, which coincided with a BAJA bearish formation. The TP was at the 4/8th MML on this chart.
Remember the ratio of these MML level can change when we switch time-frames, but they will be in the same place.
Price did indeed pivot there and extended upward past the high, and to the +1/8th MML level 98.63, first approached at 13:30.
Chart 2 is an example of combining the fibo fan plot with the Gann_SQ9 indicator. We can see the top hit the 90-degree level of 98.67, which is a significant ratio.
We also made a horizontal fib extension plot, using B-C swing of
High = Jan 17th 12:00 98.32 Low = Jan 18th 08:00 97.68
161.8 = 98.71.
This top was near Jan 13th high 98.80, and Jan 5th-6th resistance.
BUY entry can be after the close of the 09:00 candle at 98.19, since it closed above the fan. The blue 45-degree level was 98.17. As price chopped up, the 45-degree ended up acting as support.
Remember the basic - when price hurdles resistance, it becomes support, and vice-versa.
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With this pair, we had a bounce trade off fan, then a breakout from fan (diagonal breakout).
Split-screen
Left is 5-min, in order to show more MML levels.
Right is the same 4-hour Wolfe Wave chart and APF.
Price pulled back after hit to middle fork. The next resistance was the 50% 1.28495 retrace level from wide plot using
High = Jan 3rd 16:00 1.30760 Low = Jan 13th 12:00 1.26229
This level was also pivot low from Dec 29th.
Back to the 5-min chart, we can see the 2/8th MML level there at the 1.28479. This held up through the European session. First approach was a bounce trade opportunity.
Currently, this level being tested to the upside. next resistance is wide 61.8 = 1.29029, 2/9th MML 1.29395, and APF upper fork.
Here's 15-min with session colors. We cab see the breakout of the Asian High (yellow box). Fib plot Low = 08:30 1.27330 High = 09:30 1.28150
As illustrated on the last post, resistance was near round number 1.28500. Therefore, an intra-day breakout trade would target about 20-30 pips. S/L options at 5-min MML and pivot (low) levels should keep R/R at least net 1:1
The 138.2 extension was hit during the 10:15 candle period, which was a long-legged doji. This is view of resistance for exit on breakout, as well as another view for the bounce trade down.
Currently, price just touched the 161.8 extension level of 1.28639 during the 17:30 period, and bounced.
Split-screen
Chart on the right:
4-hour chart, but you can drop down to the 1-hour to see price respect the Gann_SQ9 levels.
We want to point out a possible trap on a false breakout ot the downside. We can see the previous major pivot low on Jan 13th 08:00 candle .94058.
The current 16:00 candle broke just this level. However, there is a level at about .93900 that was S&R during December. We drew a white horizontal line identifying that level.
Price even dropped below that support level. However, with the Gann_SQ9, we have the significant 180-degree level just below that, at .93790. It will usually bounce (or reverse) at this ratio.
The round number of .94000 is also significant, as some bounce traders are also tugging to the upside, at least temporarily.
Chart on the left:
This tells the story on a micro-level. Fib plot uses Euro session high/low .94957 and .94071. This just established pivot low of .93842 was a 127.2 extension to the downside.
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Bottom line: the day trader does not want to be stuck with a SELL position that might be the very lowest price, while market loses volume. Trader would then have to wait through the docile Asian session as well. Not a typical place to be for this style of trading.
This was only good if the plan was to exit quickly at the 127.2/180-degree (same).
CAD/JPY breakout test to upside
Can see some Euro positions moving to sidelines ahead of 09:00 EU Monthly report.
CAD/JPY testing 200% extension fib of 76.33, and wants to touch 4/8th MML 76.56.
Asian High was 75.97
Extreme top is Dec 23rd 76.71