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Paul Koszarny · 27-04-2003, 19:23

EUR/USD fractal outlook

EUR/USD posted a local low last Monday and on Tuesday bounced off regained support 1.0853. Profit taking on Wall Street and weaker than expected GDP lifted EUR/USD still higher just under resistance 1.1052. Weekly picture looks very bullish and we did not see any profit taking ahead of this weekend. Therefore the new week will begin exactly at Monday's pivot 1.1036, not a particularly good place to do anything unless you know the next direction. Monday is also a model day where it's possible to have a new local high somewhere near strong resistance 1.1123. I suspect the market will struggle below this level and then reverse, yet firm hourly closes above will prompt great caution with shorts despite the model day. Fractally and technically the recent rallies have been very moderate and 'under control' enabling trades both ways with little danger. During the last two sessions I held a short at 1.1040, TP 1.0970, then long at 1.0977 closed at 1.1040 and there was no need to multiply exposure. The hourly model shows Monday's 0:00CET resistance 1.1042 (support 1.1020) and it is the first model hour. From the point of view of Europe it will be more important to watch the market at 11:00-12:00 followed by 19:00CET. USDindex closed at 98.27 which is below two support lines and this model suggests a new low will be there in the course of this fortnight and the Fibonacci 97.60 will likely be broken now. What it means to EUR/USD it's easy to understand. Assuming USDindex touches only former low 97.60 then EUR/USD should be seen somewhere in vicinity of 1.1109. Mixed picture on NYSE indices. Dow Jones closed in the red zone. It's a low on fractal Friday. Normally I would expect some come back, however this time it's the first close below the basic upward trendline since March 12. So while fresh below the line it's dollar negative.

27-04-2003, 19:23	#1 (permalink)
Paul Koszarny Super Moderator Join Date: Nov 2002 Posts: 322 Rep Power: 0	EUR/USD fractal outlook EUR/USD fractal outlook EUR/USD posted a local low last Monday and on Tuesday bounced off regained support 1.0853. Profit taking on Wall Street and weaker than expected GDP lifted EUR/USD still higher just under resistance 1.1052. Weekly picture looks very bullish and we did not see any profit taking ahead of this weekend. Therefore the new week will begin exactly at Monday's pivot 1.1036, not a particularly good place to do anything unless you know the next direction. Monday is also a model day where it's possible to have a new local high somewhere near strong resistance 1.1123. I suspect the market will struggle below this level and then reverse, yet firm hourly closes above will prompt great caution with shorts despite the model day. Fractally and technically the recent rallies have been very moderate and 'under control' enabling trades both ways with little danger. During the last two sessions I held a short at 1.1040, TP 1.0970, then long at 1.0977 closed at 1.1040 and there was no need to multiply exposure. The hourly model shows Monday's 0:00CET resistance 1.1042 (support 1.1020) and it is the first model hour. From the point of view of Europe it will be more important to watch the market at 11:00-12:00 followed by 19:00CET. USDindex closed at 98.27 which is below two support lines and this model suggests a new low will be there in the course of this fortnight and the Fibonacci 97.60 will likely be broken now. What it means to EUR/USD it's easy to understand. Assuming USDindex touches only former low 97.60 then EUR/USD should be seen somewhere in vicinity of 1.1109. Mixed picture on NYSE indices. Dow Jones closed in the red zone. It's a low on fractal Friday. Normally I would expect some come back, however this time it's the first close below the basic upward trendline since March 12. So while fresh below the line it's dollar negative.