Eddie’s Crayons…*

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Close of Business 28th February 2018

Client Release 1st March 2018

General Release 8th March 2018

CONTACT

eddie.tofpik@admisi.com

T +44 20 7716 8201

TR Eikon IM: Eddie Tofpik

Twitter: @EddieTofpik

www.admisi.com

Eddie Tofpik

Head of Technical

Analysis & Senior

Markets Analyst

Eddie’s Crayons…*

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The Bullish June – Sep 2017 Schiff Pitchfork has been pretty brilliant at determining the angle-of attack of the recent Bull move and has been especially helpful in recent times. The Upper Tine (currently 1.2638) halted the market rise in Jan and continued to erode the Bullishness during Feb. The Middle Tine (currently 1.2274) offered support until earlier this week when it was broken. In the period in between we’ve formed a Double/Triple Top on the Daily Chart above with a potential target in the low 1.1900 area. We’re not immediately likely to see that as we have a helluva lot of support under the market and theoretically we’d only be going into Neutral from Bullish if we did…that’s based on the information currently available. We might well try up to the Middle Tine but we’d likely be rejected if the Pitchfork action is true and move back down. Only consecutive closes over the 50% Fib currently at 1.2358 would negate such a scenario. Underneath, we also have a touchstone for the move…the Sep – Dec 2017 Reverse H+S Neckline support (currently 1.2135). That’s just below the significant 1.2160 low in Jan but the former is more important. Then there’s the key Nov 2017 – Feb 2018 50% Fib at 1.2053…that’ll need to be overcome. Finally, little ahead of the Target and the Lower Tine of the SP (currently 1.1909) is the Medium MA (currently 1.1991). Consecutive closes below that MA but within the SP would put us into Neutral. Only consecutive closes under the Long MA (currently 1.1810) would likely swing us over to Bearish. With this in mind and with one MA (the Short MA) turning lower, I’ve decided to move the bullet point above off fully Bullish and into mildly Bullish to wait to see what happens.

Eddie

Tofpik

with

Thomson

Reuters

Eikon

TREND

UP? EURUSD Eddie Tofpik with Thomson Reuters Eikon

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I mentioned last time the Area of Congestion based around 1.4350 – 1.4650 and that we had just started to run up into it last month…and then stopped. I also pointed out last time the ‘…key underpinnings are the old 1.4040 area plus the recent 50% Fib at 1.3898…’. The market agreed with this synopsis and in the past month it decided to initially Bearishly take out the 1.4040 and 1.3898 levels, pull back up and then make sure by pushing down again and this time crashing down & through the key Nov 2017-to-date Up-trend (currently 1.3776). So far we’ve had only one close below but we may be on for a second one today. Why do this? Because when we were testing the noted overhead Congestion mentioned earlier, we’d made a Double Top with a Target about 1.3675. What is especially interesting about that level is the coincidence with the 50% Fib at 1.3683 of the key recent Oct 2017 – Jan 2018 move. It would seem that we may see a try to these levels and that it may try to exhaust the market trying to go further lower…we’ll wait and see. Just in case prices do follow through lower…or just in case we do turn around and back up. There’s a Bearish Channel formed since Jan with support currently at 1.3592 and resistance at 1.4032. Both these levels are interesting as below we have the rapidly advancing Medium MA (currently 1.3550) support whilst the Upper Channel is in fact a Four-Point Downtrend and therefore ought to be reasonably solid. With all this in mind and plus Short MA turning down, I’ve decided to move the bullet point into mildly Bullish from fully Bullish. Currently Neutral would be consecutive closes below the nearby Medium MA whilst Bearish would be the same below the Long MA (currently 1.3291).

Eddie

Tofpik

with

Thomson

Reuters

Eikon

TREND

UP? GBPUSD Eddie Tofpik with Thomson Reuters Eikon

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Last month I was sceptical of the rise I’d seen as we hadn’t managed to overcome the resistance of the 50% Fib of the Oct – Dec 2016 move at 0.8834. Well, the market decided to do just that in Feb and we saw a move higher followed by falls back. The most interesting feature of these early moves was the gradually ascending lows and fairly static highs, usually seen as a Bullish pattern. Then this week I thought we’d broken the back of the rise as the pretty reasonable Jan-to-date Uptrend (currently 0.8801) was breached… twice. However, we did not have any close below the Uptrend and then yesterday we had a great Key Reversal Up on the Daily Chart. This has led to today’s punch up through the (somewhat broken) Nov 2017-to-date Upper Channel (currently 0.8873) and an attack on the Long MA resistance (currently 0.8885). I will watch this one carefully as I think we are coming to a cusp in action as along with this move, we also have a potential Key Reversal on the Weekly Chart. For a KR Up we’d a close tomorrow (Friday the 2nd) over 0.8850. For a KR Down we’d need a close under 0.8780. At the moment the upside is looking more promising. So what’s ahead…well, the key overhead levels are two Fibs. The 61.8% Fib of the Oct – Dec 2016 move at 0.8959 and the perhaps more important Aug 2017 – Jan 2018 50% Fib at 0.8996. Given the details above and also the mixed nature of the MAs I’ve decided to move the bullet point above away from mildly Bearish and into Neutral…just in case.

Eddie

Tofpik

with

Thomson

Reuters

Eikon

TREND?

EURGBP Eddie Tofpik with Thomson Reuters Eikon

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I’ve written and spoken at length about the H+S Top formed over Sep 2017 – Jan 2018. In Jan we started to test down to it and last month we fulfilled its Bearish Potential. To recap from my last commentary ‘So what next? Well, as a guide I’ve pointed out above ‘X1’ (approximately 106.60) as a potential target for the first follow through of the Shoulder of the H+S Top and ‘X2’ approximately 106.30) as the finally target for the H+S Top. Both are very close together and I think that because of that the support would be doubled…and harder to achieve.’ . As it turned out they weren’t that hard to achieve and we even had a decent follow through lower before once again utilising the old 61.8% Fibs at 106.55 and 106.68 as a support for an almost Descending Triangle Pattern. This brings me nicely to the key feature of the Daily Chart above today…the Jan-to-date Downtrend (currently 107.56). This is a Three Pointer so it ought to be reasonable resistance as it has also been so in the past. The question is the testing of it? If it breaks, then it is not the end of the Bearishness and the start of a Bull market…no! Overhead, we have to start with the wide Congestion Band 108.50 – 109.75. Then there’s the key 2016 50% Fib at 108.86 in the middle of the Congestion plus the old descending Neckline of the original H+S Top previously mentioned. If we carry on lower then we have an ominous whale of support approaching…the 2016-to-date Uptrend (currently 104.31). That may take some chewing if the market chooses to try to go through it. Given all this…it is one to watch closely and for the moment given where we are and what the MAs are doing…I’ll keep the bullet point above fully Bearish.

Eddie

Tofpik

with

Thomson

Reuters

Eikon

TREND

DOWN USDJPY Eddie Tofpik with Thomson Reuters Eikon

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I pointed out last month how the Bullish Channel we’d seen since Dec 2017 was coming to an end plus…’It looks after all that whichever of 0.8160 or 0.7817 (recent 50% Fib) gets taken out first will likely determine the direction.’. Despite some earlier false starts it seems yesterday’s final two consecutive closes below the 0.7817 level has settled the issue as yesterday we also had a close below the combination of the very strong Medium MA (currently 0.7772) and the Long MA (currently 0.7787). Closes below these last two are important and we look set to have a new lower consecutive close again today. Interestingly today we have also breached the May – Sep 2017 50% Fib support (currently 0.7730) plus the support from the Lower Tine of the May – Dec 2017 Andrews Pitchfork (currently 0.7733). Closes below these would also be significant. So where next...well, the short term question is whether the action over late Jan-to-date is in fact a Bearish Halfway Hesitation…possibly a Bear Flag? That can be a reasonable interpretation and would suggest a potential Target around 0.7650…marked by an ‘X’ on the Daily Chart above. The second question is longer term…is the whole action from May 2017-to-date a form of Double Top? It seems reasonable at this time, especially if we start fulfilling the Bearish HH/Flag Target…but one to watch. Topside…well, you’d need consecutive closes over the Dec 2017 – Jan 2018 50% Fib at 0.7816 to even talk about neutralising the move lower…seems unlikely at this time.

Eddie

Tofpik

with

Thomson

Reuters

Eikon

TREND?

AUDUSD Eddie Tofpik with Thomson Reuters Eikon

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Last time I wrote about the longer term Vomiting Camel Pattern which had gotten us to where we were at that time. This time I’d like to concentrate on the shorter term action. The key feature is the breach on the upside of the Dec 2017-to-date Downtrend (currently 6.3513). We’d formed some Bullishness as we’d fallen to the Lower Tine support of the 2017 Schiff Pitchfork (currently 6.2520) and whilst taking into account the New Year Holiday’s we’d managed to form enough support to stage a pullback up, almost to the high Feb as at the time of writing. If we do form a second consecutive close over the Downtrend then we’re in pretty clear water till we reach the recent 50% Fib resistance at 6.4664. Above that is the 50% Fib of the 2014 – 2017 move at 6.5005 but that would also be close the descending Medium MA resistance (currently at 6.5067) and may be a big ask. On the downside, under the Lower Tine we have some mild support at 6.2494 but we then have a Gap till we reach the Bullish Congestion zone 6.2110 – 6.1780. An interesting few days ahead to see if the recovery will continue... Given recent action and the turn up in one of the MAs, I’ve decided to move the bullet point above into Mildly Bearish from fully Bearish.

Eddie

Tofpik

with

Thomson

Reuters

Eikon

TREND

DOWN? USDCNY Eddie Tofpik with Thomson Reuters Eikon

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Following my commentary last month we had our second consecutive close up over the then key 63.78 level and rallied higher where we hit resistance in the form of the Medium MA (currently 64.36) and Long MA (currently 64.38) before backing down a little. However, we then made a superb Key Reversal Up mid Feb that pushed prices up straight through the MAs and into fresh territory including over the key 50% Fibs at 64.38 (Nov 2017 – Jan 2018 move) and 64.56 (Sep 2017 – Jan 2018 move). We then consolidated over these levels before an attempt at the key Nov 2016-to-date Downtrend at 65.21. This is where we currently are…we’ve tried up and over the Downtrend but as yet not closed over it once. So where now? It very much depends on consecutive closes over the Downtrend. If we do close over then The Nov high at 65.54 and the Sep high at 65.89 may come into view. If not and we close lower then we look to test down to the previously mentioned 50% Fib & MA supports. One more thing to note rather than immediately respond…is the whole action since 2017 a HUGE Reverse H+S Bottom? One to ponder…in the meantime, given recent action and the upward turning and moving MAs it is appropriate that I move the bullet point above into Neutral.

Eddie

Tofpik

with

Thomson

Reuters

Eikon

TREND?

USDINR Eddie Tofpik with Thomson Reuters Eikon

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Last time I wrote about the market going into Neutral and how we’d not really tried down to the 50% Fibs at 3.2336 (Dec 2017 – Jan 2018 move), 3.2233 (2017 move) and the Long MA (currently 3.2212). Well…we did in Feb! We punched down through all three but only managed consecutive closes under the 50% Fibs. The Long MA held on a closing basis and was even tested as recently as this past Monday & Tuesday (Pipe Bottom) without failing. Though we’ve had some large ranges at the beginning of the month, we’ve calmed down towards the end of Feb as you can see by the narrowing of the MAs. This nicely brings me onto the key feature of the Daily Chart above. We’ve had the Short, Short/Medium and the Medium MAs all coming together and crossing over simultaneously and then separating away. This would typically be seen as a Bow Tie formation of the MAs. However, this rare Pattern is not ideal. The order of the MAs coming in and departing is not correct – shortest to longest in and vice versa coming out. Nevertheless, I’m going to ask you to watch this Pattern as typically we have a move in the direction of the MAs expanding outwards in about 15 – 20 working days after crossover…or between the 19th – 26th of Mar…watch out during that time. My one concern is the unclear direction of the exiting MAs…I’d typically say it would be Bullish but I’m not certain as yet. With that in mind, I’m maintaining the Neutral bullet point above until the MAs sort themselves out…hopefully by the next time I write.

Eddie

Tofpik

with

Thomson

Reuters

Eikon

TREND?

USDBRL Eddie Tofpik with Thomson Reuters Eikon

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Last time I wrote ‘A Day of Days…! Up until this point I would have said we still had some Bullish construction or at

least opportunity in the market. However, as I write, I note how the market has broken down not only through the

50% Absolute Fib at 9837 but how we’ve also made new lows this year, breaking down through the early Jan lows

at 9218 and most importantly breaching for the first time the major supportive move up of the past five months –

the Sep 2017-to-date Uptrend (currently 9182). We’ve not just touched it and reversed (at this time). We’ve

punched down below 9,000 and as I’ve mentioned in many media many, many times…we’re moving towards

Neutral…we’ll this time; we may be just about reaching it.’ Neutral is what we got…sure we carried on lower…but

we stayed in between the Medium MA (currently 9174) and the Long MA (currently 5719) for the first half of the

month before recovering back over the Medium MA. We’ve continued to use the Bearish Dec 2017 – Jan 2018

Schiff Pitchfork as the Bearish angle-of-attack of the market…until the last couple of days. Yesterday we finally

moved above the Upper Tine (currently 10682) but backed off. Yet today we’ve tried again…and if we’re serious

about it then we’d need consecutive closes over it…if not then we stay within the Bearish Schiff Pitchfork and

move back towards full Neutral. Are we ready to Bullish again…that’s the question the market has to answer in

the next few days? The first real upside test would be the recent 50% Fib at 12,791. If we really want to stay in

Neutral…we’ll then we better get below the Medium MA. As we’ve shallow to flat lining MAs I’ve decided to keep

the bullet point above in Neutral.

Eddie

Tofpik

with

Thomson

Reuters

Eikon

TREND?

BITCOIN Eddie Tofpik with Thomson Reuters Eikon

Eddie’s Crayons…*

DEFINITIONS! ADMISI FX DESK

In the commentary you will note immediately following the currency pair there’s a bullet point indicating the TREND. To clarify the comments & notes for this point I’ve prepared a short summary.

TREND UP - Any one or more of the following may occur! Market has turned upwards/risen & is likely to carry on, usually till at least the next Monthly Foreign Exchange Commentary. Moving Averages (MA’s) are pointing higher or have either crossed, formed a ‘Golden Cross’ or based out. Chart patterns & trendlines (Channel, Support, Andrew’s Pitchfork, etc…) point higher. No appreciable resistance levels (Fibs, Historical, etc…) are noted.

TREND UP? - Any one or more of the following may occur! Market exhibiting signs of exhaustion after a recent rally. Prices may be achieving an upside/downside target level or approaching major/strong resistance. Market may have started/completing a rally/recovery and it may be looking indecisive/going sideways or it is too early to tell in the short, medium or long-term charts. Moving Averages (MA’s) may point higher or have positive crosses but the picture is not conclusive. Some, but not all chart patterns & trendlines (Channel, Support, Andrew’s Pitchfork, etc…) indicate higher. Appreciable resistance levels (Fibs, Historical, etc…) are noted close to the market.

TREND? - Any one or more of the following may occur! Market exhibiting neither a bias for a rally or a decline. Market is either nowhere near or alternatively caught within narrow bands of support/resistance. Moving Averages (MA’s) point sideways & indicate no immediate likelihood of crossing. No strong chart patterns or trendlines evident. …Sometimes… I frankly haven’t a clue!

TREND DOWN? - Any one or more of the following may occur! Market exhibiting signs of a recovery after a recent fall. Prices may be achieving an upside/downside target level or approaching major/strong support. Market may have started/completing a decline/fall and it may be looking indecisive/going sideways or it is too early to tell in the short, medium or long-term charts. Moving Averages (MA’s) may point lower or have negative crosses but the picture is not

TREND DOWN - Any one or more of the following may occur! Market has turned down/fallen & is likely to carry on, usually till at least the next Monthly Foreign Exchange Commentary. Moving Averages (MA’s) are pointing lower or have either crossed, formed a ‘Dead Cross’ or topped out. Chart patterns & trendlines (Channel, Support, Andrew’s Pitch-fork, etc…) point lower. No appreciable support levels (Fibs, Historical, etc…) are noted.

THE STORY OF ‘ Eddie’s Crayons…* ’ This refers to a deep, long conversation I had with another technician (and also a very dear friend) as to where exactly the neckline on a H+S Top on USDJPY should go… to which he uttered in exasperation & seriousness the immortal words….

‘’...Eddie…it depends how thick your crayon is!!!’’

Thank you Lou – we laughed till I started to hurt & it made my day!

Eddie Tofpik, Head of Foreign Exchange Member of the Society of Technical Analysts Affiliate of CMT Association (U.S.A.) Member of ACI-UK Member of Chartered Institute for Securities & Investment (CISI)

ADM Investor Services International Ltd. operates Brokerage Services in FX, Futures, Options, CFD’s & Equities service. For further details contact me!

ADM Investor Services International Limited is authorised and regulated by The Financial Conduct Authority. Member of The London Stock Exchange. Registered office: 4th Floor Millennium Bridge House, 2 Lambeth Hill, London EC4V 3TT. Registered in England No.

2547805 a subsidiary of Archer Daniels Midland Company. Risk Warning: Investments in Equities, CFDs, Futures, Options, Derivatives and Foreign Exchange can fluctuate in value, investors should therefore be aware that they may not realise the initial amount invested,

and indeed may incur additional liabilities. These Investments may entail above average financial risk of loss, and investors should therefore carefully consider whether their financial circumstances and investment experience permit them to invest and, if necessary, seek

the advice of an independent Financial Advisor. Some services described are not available to certain customers due to regulatory constraints either in the United Kingdom or elsewhere. © 2014 ADM Investor Services International Limited 2014.

CONTACT

eddie.tofpik@admisi.com Twitter : @EddieTofpik T +44 20 7716 8201 TR Eikon IM : Eddie Tofpik