A-B-C-D Trade - page 167
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Yellow fib plot posted previously, with APF.
ABC pointing down with swings June 15th 08:00/ 12:30/13:30, has FE 78.6 1.61627 as current support, ahead of 08:30 Retail Sales data.
Sorry, mistaken about posting GBP/USD plots. Here they are on 30-min chart:
APF
Handle = June 9th 07:30 high 1.64648
Upper corner = June 14th 07:00 high 1.64404
Lower corner = June 13th 04:30 low 1.2231
Insert AML indicator.
Horizontal fibs:
Low = June 10th 08:30 1.62119
High = June 14th 07:00 1.64404
Currently Lower_ML1 intersection with FE 78.6 acting as support.
EUR/CHF at 261.8 extension (green) on previous posted chart, with strong bias to downside.
Yellow master fib has 138.2 extension at 1.20177. This is close to June 14th low, use caution here.
EUR/CHF 1-hour will show better view, including June 13th low 1.20026, which is alos near Mars 0-degree. This is the strong support level.
The protest/riots in Greece is making headline news and T.V. coverage adds to fear selling of Euro and flight to safety. EUR/CHF just bounce off area just mentioned, with whipsaw bounce.
Broke support at FE 78.6 Next stop FE 100.
We had neglected to mention pullback was to Point B level at 03:30. This happens often, and experienced traders can enter there. Candles on 30-min also closed at the 100% yellow fib.
As we await the Swiss Rate Decision and verbiage, there was a report that the ECB made a statement that EU aid fund may have to be doubled.
Greek P.M. facing confidence vote/cabinet reshuffle, while rioting in Athens on T.V. prompting tear gas response.
ECB also made statement concerned about huge bank exposure to possible Greece default.
EUR/USD 4-Hour SQ9(Price)
We showcased this chart and plot already, including its update, and bring it right up to current time. Start = 1.39682 (May 23rd). From the top on the left, is the May 4th high 1.49388. From that top to bottom 1.39682, it was 720-degrees or 2 cycles of 360.
We’ve colored the 1/4th levels of 360 in pink. The June 7th Head of the Head & Shoulders was at the 540-degree level. A conservative exit on the H&S was at the 360-degree (thick pink) on June 10th. The left base was June 3rd for this scenario
The next exit for the H&S was at the June 12th 270-degree level, which pairs up with left base on June 1st. The fibo fan’s 61.8 met the 270-degree.
The subsequent pullback was big, nearly to the 405-degree, for about 150 pips. The 50% fan ray was also at that June 14th peak.
At this point we have the top as the high and the 270-degree as the low, for the fib plot.
The June 15th 08:00 candle broke the 61.8 fib of the fibo fan. Pair made the 138.2 extension on June 15th 16:00 candle period, just after stalling slightly at the 180-degree and 78.6 fan ray.
And finally, pair made the 161.8 extension during the June 16th 04:00 candle period. This area was met by the 88.6 fibo fan and the 90-degree SQ9.
The bounce off the 161.8 has just made it to the 78.6 fan ray and candles closing below the 180-degree SQ9 level.
During live comments, it can be a little hard to follow, so we often review in a biiger picture format.
EUR/USD 1-Hour Fibo Fan & ABC
This fan uses the same plot, except we have it on the 1-hour, allowing us to see the swings better as they interact with S&R.
From the top, we plotted an ABC. The FE 100 1.43258 was the weekend bottom supported by the fan's 61.8. The bounce off that leel back upward hit reistance at Point B price level, which was met by the fan's 50%.
The bounce down off Point B hit support at the FE 61.8. From here, it tried to break Point B resistance, but was thwarted by the 50% fan ray, after probe. There was BAJA bearish divergence with these 2 peaks.
We can see the subsequent extension downward respect each FE level.
The bottom also had BAJA bullish divergence in event trader wanted to go long. That bounce went back up to the original (white) fan's 78.6.
What we want to point out next is the move of the high on the fibo fan plot. We marked the new high with a red "X", at the June 9th 12:00 candle high. We drew red trend lines at location of new 78.6 and 88.6 fan lines.
These 2 red lines caught the last 2 dips. THis technique has been covered, but we wanted it in this "bigger picture".
There was a meeting of EU leaders in the early morning, to discus the Greece crisis, which had been driving down markets and the Euro this week.
By the 09:00 hour, rumors began to circulate of a deal. Sure enough, it was later confirmed by Merkel and Sarkozy that bond holders will voluntarily reinvest in a 2nd tranche bailout loan to Greece.
Let's switch back the the crowded EUR/USD 1-hour with PSQ9, and all of the labels and plots since the "Trichet Candles".
We last left off pointing out the adjusted fibo fan catching the last 2 dips at bottom. The bounce off the bottom to the original 78.6 fan ray established Point B. The pullback was precisely 61.8% to form Point C during 05:00 candle. That was also near the Moon 0-degree.
That was the set-up. The 06:00 and 07:00 were supported by the 61.8 fib. The 08:00 was EU meeting. 09:00 was rumor hour. 10:00 hour had confirmation.
Since the pullback was precisely at 61.8, the extension levels are the same using the fib retracement tool and the fib expansion tool. The FE 100 same as 138.2. The FE 127 same as 161.8.
The white dotted fibs are derived from the wide plot of May High to Low
The blue 0% fib is the June 10th low, which was the 50% pullback May 23rd Low to June 7th High. It is the FE 127 from the Trichet plot.
The markets are driven by data and news events. The price and technical analysis allow us to estimate which level the market will have stalls or turning points.
In addition to watching live financial shows, we need to have a reliable FX news feed/service that reports immediately. This particular scenario would have certain type of traders moving to the sidelines once the EU meeting was taking place (08:00 hour).
These traders may have targeted pips between the 61.8 pullback and the:
38.2 level
Mars 270-degree
Point B level
Original 78.6 fan line
Once the rise came during the 09:00 hour, trader may have already exited. On the other hand, when trader saw movement in trader's direction upward, and the Greece deal at this point is only rumor, trader may opt to stay in trade and optionally move stop-loss.
When we switch the interval to the 15-min, we can see the swings as the break of Point B occurred. The pair bounced off the FE 78.6 (intersected by Moon 90-degree) and dipped below Point B. This is one of the important lessons that was in the beginning of this thread.
We had preached plotting the ABC in order to understand how the market is swinging to fibs. We preferred this method versus a simple stop-loss below breakout point (in this case it is Point B). Those lessons involved using the Asian High or Low as the breakout level.
In this example, we have recognized our plotted S&R levels for stop-loss placement at various stages. Using pivots, fibs, PSQ9.