Tuesday, December 4, 2012

EURUSD, DI - Technical Analysis

  1. The 4 H chart of EURUSD above shows a possible Inverse HnS. Now we have already broken out of the NL, suggesting we should target the minimum requirement for this pattern which comes around 1.3360, thats a big distance away.
  2. Many things can happen in between, first of it would be a possible resistance at the green TL overhead, which is actually a NL for a bigger HnS on daily fractal.
  3. If we take out the green line, it would be again very bullish, as then the possibility of a higher tgt as per the bigger HnS would come into play.
  4. If we count the whole rise from the last low around 1.2650 as impulsive, I have something to add. If wave labels are as shown above, then the wave 3 may be the extended wave, but then wave 5 could not go beyond 61.8% of wave 3, if it has indeed crossed above that mark, tow possibilities exists. One wave 5 may be extending, in which case it has much further up to go (supports the HnS case), or the wave 3 is subdividing (which again supports our case for higher prices). 
  5. So apart from the green TL above I cant see any serious trouble to our view of higher prices.
  1. Now this is a super bullish possibility. We can see a clean Inverse HnS here, and unless prices cross below the possible right shoulder low, this count is in effect.
  2. We may get resisted at the proposed NL, and form a small sideways correction, but should break out on the upside.
  3. The possible triangle at the end of proposed left shoulder provides a slew of resistances for prices to churn about, but that should be a time issue instead of a price issue, on the other had if we could break out above it in relatively less time, then that would add tremendous fire power to the bulls.
  4. Especially the last two peaks in the triangle would be critical.
  1. To add credence to our bullish EURUSD outlook, I tried to see how DI is behaving. 
  2. We can see a possible mirror image of the EURUSD HnS on the 4 hour fractal on DI, with possibly the same implications.
  3. There is a caveat, about possible support at the black horizontal support line, discussed in the comment on the chart.
  1. The daily chart however is the one which gives us confidence to expect more downside in DI. If our HnS on the 4 hour fractal is correct we may see the tgt for that HnS around the blue line shown on the daily chart.
  2. This blue line incidentally may form the NL for a bigger HnS in DI, quite similar to EURUSD. Now we have already crossed below a minor support shown by black line on the chart above. And the next support range may come around the blue line marked by a black rectangle, which is actually the tgt zone for the HnS on the 4 hour fractal.
  3. So all in all we have a lot of evidence to suggest that we may have at least some room on the downside before we can expect some meaningful support for the DI (blue line), but below that we may see losses extending much further.
This analysis is just to share possibilities in the two markets discussed above, this is not a recommendation of any sorts, nor is supposed to support or refute any form of TA or theories. My objective is to be a profitable trader, and hence sharing with those who care, things which I care about.
Your opinions, comments and criticisms are welcome, but only condition is them being constructive.

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