Forex EUR/USD Daily Video, May 16, 2024

[Sive Morten]

Good morning,

So our EUR journey of this week is over - market has hit 1.09 target. Now we're at stage of transition to higher time frame trading and consider bigger patterns to follow:

 

[403fxboy]

Hi Sive. What do you think about a H&S failure on the Daily?
Is the distance between end of right shoulder, down, then back up above the neckline for failure confirmation took too long to develop?
Weekly confluence is 1.630 area strong fibnodes make me wonder if this is a H&S failure. On the Weekly euro finally broke through 25x5 DMA + crossed over MACD Predictor so maybe that's the reason for the H&S failure to confirm?

Thank you

 

[Brett Reynolds]

Many commentators and others have been forecasting 'Back to Parity' for Euro and also 'collapse' of £GBP etc. It could well be the case that both currencies 'Hit their Bottoms in Sept 2022. This was also when ALL News agencies were calling Doom & Gloom after the Liz Truss debarcle. Just utter Boloni.
This month of May lows now are the most important for both Euro & GBP...as we could now be starting a new Bull cycle on both currencies as per your video last week about 'Larger Butterfly' on GBP etc.

 

[Sive Morten]

Many commentators and others have been forecasting 'Back to Parity' for Euro and also 'collapse' of £GBP etc. It could well be the case that both currencies 'Hit their Bottoms in Sept 2022. This was also when ALL News agencies were calling Doom & Gloom after the Liz Truss debarcle. Just utter Boloni.
This month of May lows now are the most important for both Euro & GBP...as we could now be starting a new Bull cycle on both currencies as per your video last week about 'Larger Butterfly' on GBP etc.

Well, currently is very tricky moment. The rally we see mostly is due to the way how markets treat recent data, this is the reaction. But the data itself is a bit "adjusted". The CPI usually, when it is calculated without any cheating is the fastest way to get the insight on inflation. Now it is not any more. But inflation and other problems are not disappear - they will manifest themselves sooner rather than later. But it will happen in different indicators and this will happen after some time. Thus, I wouldn't totally deny the scenario with parity and 1.20 GBP level...

Yes, now we've got bullish reversal that will last for some time and we will follow it. But, bearish scenario could return. In fact it is not disappear, it is just of a bigger scale and could include current rally that we have as a retracement, we'll see. EUR needs to jump above 1.15 for cloudless upward perspectives.

 

[Sive Morten]

Hi Sive. What do you think about a H&S failure on the Daily?
Is the distance between end of right shoulder, down, then back up above the neckline for failure confirmation took too long to develop?
Weekly confluence is 1.630 area strong fibnodes make me wonder if this is a H&S failure. On the Weekly euro finally broke through 25x5 DMA + crossed over MACD Predictor so maybe that's the reason for the H&S failure to confirm?

Thank you

To speak strictly by Joe DiNapoli terms, we have "Oops!" directional pattern. Right under the neckline we have 1.06 weekly K-area, while H&S target stands under it. So, EUR was not able to completed it, turns up from K-area and now moves back above the neckline. We talked about 1.06 but at those moments considered it like a possible retracement. As market sentiment has changed - it is not a retracement any more.

Classic H&S failure happens when market doesn't break the neckline but somewhere on a stage of right arm fails to go down and returns back, breaking arm's top. It will happen around 1.10. Taking in consideration all technical information that we have, by market mechanics it is obviously the failure. Because price performance absolutely contradicts to normal H&S behavior. Thus, reaching of 1.10 is probably just a question fo time.