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Weekly EUR/USD analysis: February 4 - 8

By JohnLast 2995 days ago Comments (10)
EUR/USD had a strong upward momentum last week and made a substantial 1.3 % climb hitting a 14 month high. Despite the fact that the movement was a textbook break – out from the consolidation area between 1.325 and 1.34, the sharp rise took the majority of the human traders by surprise. The rise trapped many traders. 
 
From a technical perspective the question is if this pair would show some exhaustion patterns? For this reason the first trading day of the week will be of paramount importance. After the such a sharp rise the daily candle of 04.02.2013 will be very important. 
 
The recent market fluctuations were closely related with the fundamental releases. In the weak ahead many fundamentally important events are scheduled to take place, that would lead potentially to a lot of volatility. 
 
 
Trading outlook: 
 
The trading outlook is difficult this week, the pair is in an uptrend having incredibly strong momentum and fundamentals. This situation is difficult for the majority of human players who are actually trapped in their short positions. 
 
As the pair is strong not only from technical but also from fundamental perspective the best solution would be to exist at the first correction, in that respect a reversal doji after Monday would be  great news. 
 
As for the entry in the direction of the trend, I would say that this is difficult if you want to have close stops. 
 
A break – out above the last week close at 1.37 would be a good break - out entry, and potentially a trade for at least 50 pips up to 1.375. 



Main Weekly Resistence : 1.38

Main Weekly Support :1.34, 1.35


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Comments

  • JohnLast 2993 days ago

    On this shot I would post another technical study with fibo retracements. You can see how the same proportions appear again.

     

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    От technical outllok
  • JohnLast 2989 days ago

    The provided support zones at 1.34 and 1.35 were correct. The market this week was good for those trapped in their long positions. I am not ready for technical outlook for the next week, and I wonder how long I am going to continue with this.

     

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    От technical outllok
  • JohnLast 2989 days ago

    I think it is a good practice to look back what happened and what has been said. Where were the errors in the analysis and was it possible to avoid them.

    The reason is while we work hard to test mechanical systems, technical analysers are not back tested with scrutinety if at all. I think it is good to back test technical analysts on the web and select those who are giving the best technical analysis.

    So you may ask who are the best free technical analysts on the web?

    How do you know that?

    It is very important to watch what the best analysts (historically) are thinking in order to have a map for the market. Or at least to confront your own analysis. I think it is not a good idea to read books and then to think that in a month (even an year) you can do it. 

    Technical analysis is a skill that takes a lot of time to learn (despite the fact that the entry barrier is low and everybody can grasp during one week -end  its basic tenets).

    Finally as there is a plenty of free information on the web the question is how you can filter what is usefull from what is not.


  • JohnLast 2989 days ago

    I wonder if anybody here has idea who are the best free technical analysts on the web!

  • JohnLast 2988 days ago

    Here I want to show how the market profile reacted at the levels that were predetermined as support zones. 

    A good support zone should be an attraction point for market activity. Some kind of an attractor of the Volume Distribution and the peak volume price (PVP).

    In the second video the french trader showed that if you draw random support and resistence you still will find a lot of matches. But here thanks to the market profile we were able to see that our projected support zones matched the market profile. If you read more about the analysis of open orders clusters you will find why I think so.


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    От technical outllok
  • CamaRon 2987 days ago

    In regards to who are good at reading charts, i.e. making money - take a look at what Ken does.

    http://www.acegazette.com/blogs/ken/

    These guys are all about s&d, and very little else.

    Cheers.

  • JohnLast 2987 days ago

    Hi CamaRon, so you suggest to put Ken on the watch list. 

    Howevever does he make technical analysis, or is just publishing trades after the fact. You know what is the purpous of trades after the fact.

    I was watching Saxo bank with their service for technical ideas from Sostratos, but on EUR/USD they look like to have a streak of loosing months. 

    The other free available service is the Autochartist but despite their rocket performance I wonder why nobody writes about that. 

    Anyway signal service is something indeed interesting but a separate topic, a topic I do not have the time to do a lot of things. 

  • JohnLast 2986 days ago

    I do not understand what you are saying.

  • CamaRon 2986 days ago

    No, I don't suggest you put Ken on the watch list. I misunderstood what you meant.

    As supply & demand traders, they have the trades mapped out in advance, and don't prognosticate.

    Have you tried this little gem of an indicator? http://insanityindustries.net/viewtopic.php?f=10&t=10

     

  • JohnLast 2984 days ago

    Thanks for the link. I did not know this site. However you can check my support and resistence zones, and you know I did not invent them, nor I used any magical indicator. 

    Those future support and resistence zones are in the orderbooks. In order to get the whole idea about support and resistence it is important to have a look in the order books not only at the charts.

    The prices very often overshoot the true support and resistence levels and that adds a lot of confision leading to large errors in support and resistence identification relying only on charts.

    The charts are often very misleading with lots and lots of fake technical patterns. Very dangerous are the patterns which rely on projections of volatility like projections of contracting of volatility.