Questions from Students (Week 18)
Questions from Ben
Find it quite interesting as there is a DAY close yesterday below 1.3248 (Pt 3 marked on my chart in PIC#1). It’s one of the key resistance turned support line but the price is being resisted at 1.3161.In the weekly chart from PIC#1, it seems like there’s many support around this price level, which i have highlighted in red boxes as shown.
Can i say that price should be hovering around this area for a consolidation or if there’s a WEEK close below the 2 red lines I drew on the weekly chart, is there a possibility of price heading south?
The overall trend looking at H4 & D1 is still UPTREND as price is being supported at the 2010 & 2011 high, we should be looking at BUYING opportunity to be in line with trend in the BIGGER time frame. As long as the price is still intact in the Big ED channel I drew on the weekly chart, its still Uptrend for this pair.
If we short now, it will still be counter trending? But, DXY index is really CMI this week & i haven’t been executing on any USD pair this week, haha. :)Hence, looking at the H4 chart, PIC#2, I have identified a 1234 on the chart looking for buying opportunity.
HOWEVER, my point 2 & 4 seems to have quite a big GAP and it seems like it has fallen out of the ED channel I drew on H4.
How should we do our analysis from here?
I reproduced Benson’s chart here with boxes that we are familiar with. The horizontal lines may not have same values but that level of precision is not necessary for monthly chart because prices CAN overshoot.
1. Price has reached a previous support – resistance level based on point 3 so even the tail evident in this chart shows that there is a price reaction.
2. Will there be a consolidation, can there be a Southward movement if there is a weekly close below this line? Yes. Although retracement is norm, it may not happen every time.
3. Is H4 and daily time frame still up trend? NO. Year – year is up. Month – month and week – week are already down. Any up from here is merely retracing losses.
4. How will congestion look like? Possibly a ping pong action between ‘1 YL’ and ‘2 YL’.
5. Is a short now counter trend? No.
6. Lastly is the 1-2-3-4 correct? No. Because the premise of your analysis is uptrend, the 1-2-3-4 was correctly drawn with point 1 at high. But since the trend should be down, any 1-2-3-4 should be drawn with point 1 at low.
USDSGD is a short candidate. This is a currency pair that I will look strictly from a shorting point of view from daily and 4-hourly time frame. Although year – year is up, that time frame is not our concern. In fact the downward momentum is very strong considering that April’s bearish expansion totally ate up 2-months of rally from January and February. The current low should be labeled as point 1. ‘2 YL’ may act as resistance.