Only three days ago, I took the opportunity of a long entry based on a which confirmed support near the 87.350 level. A layered analysis comprising my prop predictive analysis and forecasting favored a directional bias with a series of targets of moderate-probability quality.
Despite being a technical analyst, I like to make sure that the "real world" foundation upon which I build my analyses remains solid and reliable for the future before using turning to abstract methodologies that define my predictive analysis and forecasting system - much like a painter has to ensure the quality of the canvas before turning to its interpretive sense of the landscape.
For this exercise, I like to turn to what central banks are currently thinking or are likely to do in the weeks or months ahead. My sources are simply news outlet, easily reference my mere Google queries. So, let's see what the fundamental data reveals of each of these currencies, before we turn to the that led me to take a long position and caused me to pin overhead resistance and forecast levels.
In essence, I am walking you, TradingView trader, through the step-wise analysis in which I engage. In real time terms, it might take me about 20 minutes to establish a bias through fundamentals and , then a bout 2-3 minutes to check the charts once or twice a day.
Let's delve into the fundamental then technical analyses.
FUNDAMENTAL DATA AND ITS EFFECT ON PRICE IN THE CHART:
At best, for the NZDJPY trade to move in our forecast direction, significant fundamental data would need to mobilize each currencies of the chart, such that NZD moves up through propelling fundamental forces of a nature, while JPY moves through opposite fundamental forces of a nature. At worse, each currencies would bathe in a neutral fundamental environment, while NZD would confer a move, or inversely, JPY would react to a move, each resulting in a net move.
So, let's look at the fundamental news affecting each of these majors.
NZD FUNDAMENTAL DATA:
Regarding the NZD fundamental outlook, this commodity-based economy has reacted to both a significant decline in dairy pricing, yet another incremental rise in its RBNZ rate hike on April 24th, 2014. This would represent a second rate hike for the year, while commentaries have hinted at a "85% chance of another rate hike in both June and July.
WHAT NZD SHOWS IN THE CHART:
While the market for milk should pressure NZD downwards, central banks have continued to pull on the rate hiking level, this forcing NZD upwards, causing a net force behind the WEEKLY green candle - See how the green candle also retraced to regain the loss incurred by its preceding three candles, and how it is currently preparing to end this week right at the level of the forth prior candle's close.
JPY FUNDAMENTAL DATA:
ECB Kuroda's statement could not be any more explicit:
""The bank will continue with quantitative and qualitative monetary easing, aiming to achieve the price stability target of 2%"
Indeed, Japan is on track toward 2% with a March 2014 rate of 1.61% - a target that is believe to be reached in 2015 or 2016.
Here, the fundamental data supports a deliberate pressure on the Yen.
... (cont'd in the commentary body - This is a live input, so give it time) ...
Predictive Analysis & Forecasting
PS: ALL of my predictive analyses (basic and prop patterns, occult geometries, directional interpretation and reversal point determination) and forecasting methodology uses TradingView's panoply of charting tools. The charts I post are the product of use of TradingView's broad spectrum of technical tools and fundamental reference, which remains attainable to all prospective minds. That means you.
- David Alcindor
Alias: 4xForecaster (Twitter, LinkedIn, StockTwits)
Signal Service or Private Course - Contact: MarketPredictiveAnalysis@gmail.com
All updates on https://twitter.com/4xForecaster
WHAT JPY SHOWS IN THE CHART:
As with the comment made above about the NZD, reflexively, the 3-week retracement was allowed in the back of a permissively weak JPY, whose lack of resistance against the bullish pressures of the NZD accounts for the reabsorption of losses incurred in the prior 3 weeks.
However, a look at the $USDJPY (not included here, but refer to my prior analysis and bullish outlook here:
- "Technical Bears Before Fundamental Bulls" in favor of a net bullish move in $USDJPY:
(also, please refer to prior related charts available in my profile, favoring a rise in the US Dollar against a weakening JPY)
Fundamental forces are favoring a rise in the NZDJPY. One may also consider adding the Fed's own policy, which is based on a ZERO rate, against domestic and international forces that are continue to challenge the US economic picture, thus likely to force benchmark 10-Year treasuries UP.
The net intermarket analysis would likely generate added bullish commentaries in support of a rising USD in the medium to long term, thus pressing NZDUSD down and USDJPY up. But for the time being, rates continue to 3-month, 10-Year and 30-Year treasuries rates remain unchanged, at least to the extent that it allows NZDUSD to continue rising, thus working in the direction of our forecast.
( ... Following are technical analysis and forecasting details regarding the targets ... Give it a little bit of time, as this is written live - thank you).
TECHNICAL ANALYSIS AND FORECASTING ...
As indicated before, my predictive analysis and forecasting methodology uses proprietary patterns and uses non-price technical events as a way to filter through what I consider a price-based manipulative price action.
First, I decided to enter long based on a very simple structural analytical premise, which relied on the fact that a prior resistance had been converted into a potential new support. In the chart, you will that the red arrow defining the prior structural high, followed by a price action that weaved itself symmetrically around that level @ 87.298, before carving a new high @ 89.543, and then return to validate the resistance-turned-support nature of that prior 87.298.
I thus entered LONG @ 87.350 on 28 APR 2014 without any hesitation.
Prior to entering long, I made sure that both a SL would be defined (since then, I moved SL slightly above BE and up), and that overhead resistance levels would be defined (Don't enter into a room whose door locks behind you (i.e.: no change to secure a BE) and walls offer no escape opportunities (define at least partial exits in terms of targets).
The following targets have been defined (targets are defined as of today's date so as to reflect the time of being shared - more honest this way):
1 - TG-1 = 89.246 - 02 MAY 14: High-probability
2 - TG-2 = 91.103 - 02 MAY 14: Moderate-probability
3 - TG-3 = 93.666 - 02 MAY 14: Moderate-probability
TG-Hi = 101.190 - 02 MAY 14: Low-probability
With the assumption that the reader is an experienced trader, I caution the same trader to remain true to his "Plan the trade. Trade the plan" mantra. What I offer here, whether sounding dubious or compelling, is not something that I offer as a matter of debate, but rather as a matter of system-based facts, backed with a pre-emptive fundamental data.
By system-based fact, I mean that I rely on a system that has produced the predictive analysis and forecasts results, which I often qualify as "Dead-On Hits" (i.e.: price action in candles hits the forecast level at or near the tip of the candle's range, then would either show a reversal, or a significant interim resistance before price continued via a separate candle).
If you would like to discuss the data, feel free to participate. I ask that you remain within your own thread (generate under "reply"), so that the overall chart discussion remains easy to follow over time.
PS: Although I will try to keep notes and post-scriptum commentaries in here, a lot of less significant commentaries will continue to appear through my Twitter alis @4xForecaster, where I frequently information on majors.
I have recently gained access to data reflecting major institutional players (i.e.: liquid providers from large hedge funds, market-makers and institutional bank traders). So, keep your eyes peeled to your mobile phone for these tweets, as I will continue to sporadically indicate which of the majors are most bid by these banks, which are mostly bearish, bullish and which has the highest percentage of trading concentration.
I recently started to do this, and it bid very well as far as being able to see define trading sides of these institutions.
Why should you care?
Because there is no amount of retail volume or coordinated retail timing that can move Forex charts. Plus, as indicated before, the RETAIL Forex market is separate from the INSTITUTIONAL Forex market - consider a "parallel world, if you please - where trades remain in sync in the longer timeframes, but significant "slippage" (read rigging, if you please) is allowed on the retail side before it catches up with the institutional side of things. That is how retail banks where your accounts are open, make their monies, manipulating "spread for bread".
There will always be two adversaries in Forex trading: Yourself and the bank in which your account is open. These banks have the ability to see ALL of your strategies in terms of SL, TP, BE. They also understand that as a pattern trader - if you ever were one - they can easily "paint" a Gartley, Bat or whatever potential, and stir you towards a devastating ravine of sorrows, by having you concentrate on price.
Hence my reiterated cautionary comments:
"Price is the carrot dangling at the end of a stick, which is held by institutional hands".
Beware of price and become open to quantitative analyses through non-price events.
Predictive Analysis & Forecasting
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