A-B-C-D Trade - page 94
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At 08:50
EUR/USD stalling at FE 78.6, same as regular 138.2. Next is FE 100 & regular 161.8 per last post.
AUD/USD also bouncing off FE 78.6. Next support is FE 100 same as Regular 138.2 price of .9976/78.
USD bullish during European, with EUR/USD extending to FE 236.2 of 1.3139 and now probing further.
AUD/USD bounced off FE 127 to FE 100 just now.
Much higher than projected ADP employment numbers at 13:30 and ISM at 15:00 spurred continued strength.
Jan 5th EUR/USD Recap
15-min chart.
1st ABC swings (red fibs): 00:00/01:45/03:15
2nd ABC swings (black fibs): 09:15/11:15/12:30
After channeling during the U.S. session on the 4th, pair was kept somewhat tame and in a range during Asian with some Yen strength/stability in USD/JPY.
At 08:30, there was a 21-pip short-lived breakout of the Asian Low price of 1.3257.
Positive European data, including EU PMI, through 09:00 hour. This brief EUR spark marked the top, and our 2nd ABC’s Point A.
2nd ABC’s Point B was the 1st ABC’s FE 127 1.3208. Swing C price was a 50% pullback (retrace of A-B). Notice it was also 61.8 of other pivot high at 10:45 1.3262.
Couple of minor pieces of data at 12:00-12:30 primed market for upcoming ADP Employment Change. Pair broke Point B with 50-pip thrust to the downside at 13:15, just before release of ADP.
Decline met 1st ABC’s FE 236.2 (1.3139) and 2nd ABC’s FE 161.8 (1.3131).
We also had wider plot from Jan 3rd 07:45 low 1.3250 to Jan 4th 13:15 high 1.3432. This produce a 161.8 of 1.3138.
The aforementioned 4-hour fibo fan pointing up (see recent post) provided support with its 78.6 diagonal fan line, as it did many times before.
We must also acknowledge that the end of the European session often concludes a move. In this case, it did as bottom was marked during the 15:15 candle.
*****
To analyze the bounce off of the bottom, switch chart to the 1-hour interval for better view. In our opinion, there are 2 options for the plot of the high price, for the retracement. These options are the 2nd ABC’s Point A and Point C.
A conservative plot would use the Point C price of 1.3243 for the high. With bottom/low price of 1.3129, this results in a 38.2% retrace fib of 1.3173. This is the same price as the 2nd ABC’s FE 100. This is a conservative profit target.
We monitor price action to see if it respects plot. It did as witnessed by the 15:45 candle high touching the 23.6% retrace fib and bouncing. The 38.2 was hit during the 16:45 candle period, prior to advancing to the 50% fib.
Retrace top zone also was home to 1st ABC’s FE 161.8, wider plot’s 138.2, and 2nd ABC’s FE 78.6.
*****
During the U.S. session, pair revisited bottom area and bounced about 24 pips. Very close to end of New York session and considered more risky in event market starts consolidation, prior to the Asian session. Consolidation would negate any thrust of bounce. In our opinion, intra-day bounce trades are not designed to incorporate long consolidation periods.
Here is the technical theory on Ehler's Fisher Transform indicator.
The Fisher_Yur4ik_2 indicator mentioned previously reportedly is a mis-coded version (from easy language) that repaints often. We liked to used that to view the divergence humps (histogram bars). Since it sometimes repaint, it is not reliable as a trigger.
We posted both the histogram version and the cross-over version of the Ehler's Fisher Transform recently in this thread.
The histogram version has a change from thick bars to thin bars when there is an opposite movement to the trend. You can change to color of the thin bar for better viewing. This transition from thick to thin is at the same time as the cross-over in the cross-over version.
EUR/USD 4-Hour GannBox_144
The 1/8th horizontal line, labeled #18, price 1.3081 is support should pair get below last low of 1.3129 that was established from yesterday's European session activity.
The distance between those 2 price points make fib sense, as determined by using the fib retracement tool:
High = 1.3415
Low = 1.3210
138.2 = 1.3132
161.8 = 1.3083
The ABC places the FE 100 = 1.3078. The 15-min swings are 12:30/ 15:15 /17:45.
***
Edit: Also, if current pullback is fitted to have its FE 161.8 at 1.3078, retrace needs to go to the 38.2 fib of 1.3144/45.
Price level of 1.3102/04 would then have 3 fibs, including the FE 100 of the tight plot.
If we are wrong about the placement of Point A, using the Asian High price of 1.3170, then we must analyze using the other significant pivot high of 1.3163, achieved at 01:30.
In this scenario, pullback at 38.2 = 1.3142, which it just met. The FE 100 = 1.3108. FE 161.8 = 1.3088.
EUR/USD has hit 1.3144 so let's see it this is a thrust down to at least Swing B, if not more.
EUR/USD 15-min. Testing diagonal trend line.
3rd attempt by EUR/USD to break support of 1.3129 successful. Regular 139.2 = 1.3113 (hit), 161.8 = 1.3104.
EUR/USD bounced near round number 1.3100, after probing to 1.3098. Former support of 1.3129 becomes resistance.
U.S. Non-Farm Payrolls (NFP) tomorrow should keep EUR/USD bearish through Euro and early U.S. sessions.