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Working on the same fib pattern--with projection of a top above 101--shown in post from a few hours ago. A serious bounce off the 2.618 level.
8 Hour chart showing whole pattern from initial base:
A spike down and sharp recovery.
Detail shown more clearly in 30 minute chart:
As indicated yesterday, we seem to be in a pullback from the minor fibonacci level above 2.618 (and below 4.236). It is unlikely that this minor point of resistance will provide a short term top.
Instead we should eventually try to complete this pattern at the 4.236 fibonacci target above 101.
Watch to see the nature of this retracement. The move to the 4.236 target above 101 could be different than the impulsive moves we have seen lately. There could be a lot more two way action as sentiment shifts, becoming more cautious (traders locking in profits above 100 yen).
The market seems to be growing out of this pattern first noticed last week:
There was minimal resistance overnight at the 4.236 fibonacci target area, but then it was off to the races again.
But the larger pattern which grew out of the first pattern seems to be still influencing price action.
At the moment we have some resistance at the minor fib level between the 2.618 and 4.236 targets. So far the action has been tepid and sideways, but after such a parabolic move, we could see some genuine two way action. Nevertheless, the pattern now posits a target slightly above 101.
Follow up to last post on USDJPY, the larger pattern won out. Large fibonacci target hit.
Time for some pull back?
SInce last week I have been following this pattern evolving on USDJPY:
To be perfectly frank I thought it was over when the 2.618 delta area was hit last Thursday and my initial trade was a short. But then when it reversed and broke above that level, I began to project the 4.236 level as the next extended target.
But then I saw another pattern--taking the high that occurred near the 1.618 top as an alpha and the subsequent low as a beta, you get this:
Yikes. Which is the valid pattern? Both, probably. They are interwoven--and in a sense, one springs out of the other. But eventually one will eat the other.
Here are some 4 hour charts where the degree to which the price action was entrained to the fibonacci levels becomes even more apparent.
Continuation of pattern shown first last Thursday. Next target 97.80?
An update to the chart posted last night. (Last night's chart was drawn diriectly previous to the pop in EURUSD due to Citi rumor.) Potential target still in the 1.3080 region.
Is EURUSD trying to make another impulsive move above 1.30? It seems a bit counterintuitive now that the European banks seem to be competing with the American banks for the ugly baby of the year contest. But if the high last Thursday is charted as an alpha and the low Friday as a beta in a base pattern, then the impulsive move up during the New York Friday afternoon session ended within a pip of the 1.618 delta target. A common pattern would be for a retracement (which could be sideways rather than a distinct move down) and then a second impulsive wave up to the region of the 2.618 delta target. And that would be 1.3087.
Nice bounce on a retest of the region of 0.786 fib pullback. Short term double bottom?
30 min:
Continuing the view of the pattern noted yesterday, the 2.618 target continues to form a zone of resistance.
4 hour chart:
After the rally off the low on Wednesday, described by the impulsive pattern noted yesterday, a pullback stopped at the 0.786 retracement.
The "completion" on Wednesday of a medium term downtrend pattern which began in early January (charted initially on February 2 and followed with subsequent posts after that) was followed by a reasonable 200 pip plus rally.
And yet we are betwixt and between as far as projecting any sustained rally from this point. The pattern was confirmed--the bounce occurred less than 10 pips from the projected bottom. In a move of close to 1300 pips, that is fairly signifcant. And while a 2.618 target is often the completion of a move, it is certainly possible that this is merely a stop along the way.
This is what we have so far:
But if the downward pattern asserts itself once more, this is where we could be going:
The chances of this happening increase the more times passes without EURUSD rallying above 1.28.
Quick and dirty chart. Possible exhaustion of latest bull move in USDJPY at the 2.618 target.
4 hour chart:
After the completion(?) of the down pattern at 1.2520, we have had a mini-impulsive move off a base formed in late Asian, early European trading. Two strong moves up in the impulsive pattern that followed the base--the first ending at the 4.236 fibonacci target, the last exhausting itself at the rather far flung 6.854 fibonacci target.
A 15 minute chart:
A quick update of some charts from last November.
Working from the 1990 low as the start of the impulsive move--with everything from the 2000 high as a three wave correction. Target still somewhere between 550 and 600.
A possible impulsive pattern down on the daily charts:
After a long sideways period, a break to the 1.2520 target?
See posts from February 6 and February 4, etc.
Quick and dirty...
At week end, trying to place the current position of cable in perspective.
From a long term perspective we have an impulsive pattern that completed itself around the 1.35 level. This pattern seen on a weekly and daily charts.
This pattern can be seen in more detail in a series of 8 hour charts.
The move began last summer when gbpusd first began to seriously distance itself from the 2.00 level. After falling from the November 2007 high above 2.11, the market had fallen as low as 1.93 by late January 2008, but until August of 2008, it continued to probe the 2.00 level. The psychology of the market was such that a new bull move above 2.00 seemed plausible. But then in August of 2008 it dropped sharply through 1.90 and, in a 3 wave movement (the second "up" wave short and horizontal) fell to a low of 1.7443 on September 11, 2008.
This low was the end of what would become an alpha wave of an alpha beta base. A subsequent retracement up to a high of 1.8667 on September 25 would form the beta wave.
This alpha-beta base pattern would posit the following:
The subsequent pattern seemed to coalesce around these levels. The initial move down from the beta high stopped at the top end of the zone of the 1.618 target, moved back up, testing and failing to break decisively above the alpha low which began the pattern definition. Then it fell with greater impulsive energry through the 1.618 level, spiking down through the 2.618 level, but finding support right at the bottom of that level's zone.
It then moved back up to the 1.618 level, found resistance and turned around again, falling sharply through the 2.618 level, finally finding some support at the minor Fibonacci 3.33 level in mid November.
From that point until mid January 2009 the market oscillated between the 2.618 level and the 3.33 level (with a slight downward bias--a succession of slightly lower lows).
Then on January 16 it began its final wave down, finding a bottom at the 4.236 delta target zone. on January 23. (The theoretical 4.236 target was 1.3483, actual low was less than 20 pips higher.)
Since then the GBP has bounced above the previous support line slightly above 1.46.
This bounce has come in a three wave corrective pattern that has internal consistency and could be seen to end with the 1.4983 high on Monday, February 9, 2009.
Again, the 1.35 low on January 23 is significant only in that it completed a pattern begun last summer. It is not to say that cable cannot go lower, only that it would require a new downward pattern which has not yet begun to form.
Although cable pushed through the 2.618 delta target, the energy of the move up seemed to dissipate there, and it spent most of yesterday gravitating around that level. A sell-off overnight and this morning has probed through the 1.48 level, but--as with the move up--no follow through. There is a minor fibonacci level there which seems to be holding.
Playing around the delta 2.618 target at the moment.
UPDATE 9:45 AM EST
Market beginning to feel comfortable resting above the 2.618 target. Next target, if this is a valid pattern, would be 1.5265.
Possiblility of a new impulsive move up (short to medium term pattern).
Alpha-beta base formed yesterday and early this morning. Alpha at 1.4482 and beta at 1.4322. The delta 1.618 target was 1.4580. Top so far today was right under that (1.4576). It has sold off since then, now below the 1.272 level (1.4525). That might prove a point of attraction against a deeper sell off.
30 minute:
5 minute:
If this pattern is valid, the 2.618 delta target would be around 1.4740.
Updated pattern first shown in Monday, Feb 2 post:
Resistance came in around the 1.618 level, now we could see support focused at the 2.058 level right below 1.28.
An impulsive move completed at the end of December, from an alpha-beta base in September/October.
Once it got above the delta 2.618 target (0.8994) on December 16th, the chart went parabolic as traders in thinning market conditions aimed for parity. But the delta 4.236 target (09800) level saw the rally run out of steam. In early January it fell even more swiftly than it had risen; by January 7th it had fallen back to the 2.618 level. It oscillated around that level for more than a week, then rallied again. A rally that failed at approximately 0.618 times the distance between the 4.236 and 2.618 delta levels (Which is to say that it failed at approximately the distance of the original alpha-beta base from the 2.618 delta level.) Since then it has fallen to a slightly lower low than the original decline in early January, and then bounced.
This sets up a possible head and shoulders pattern. At the moment the market is trading right around the 2.618 level of attraction.
Two downward impulsive patterns on EURUSD, one on an 8 hour chart and one on an hourly chart. They converge, with the 2.618 delta target of the larger pattern being in the general area of the 4.236 delta target of the smaller pattern.
8 hour:
1 hour:
