NPP Forecast for Sunday, June 10, 2018:
As stated previously elsewhere, like numerical weather prediction, Numerical Price Prediction has an intrinsic predictability limitation in the form of error growth with time.
Consequently, up until the end of last week, I was applying the system exclusively to an intraday frame of reference.
However, I believe I have expanded the forecast model so that it can now be applied to more of a swing trade type of perspective as well. But in doing so, I find it necessary to separate my analysis into two distinct aspects, which I am going to label as immediate and ultimate bias, between which immediate bias (or sentiment) takes precedence.
That said,
AUDUSD has been evidencing a bullish
ultimate bias ever since the start of this month, but a bearish
immediate bias from beginning around June 7th. When it reached 0.7569 however, it was structurally due for at least a temporary pullback, which prompted me to scalp approximately two-and-a-half pips worth of profit from the pair at 0.7586 when I became convinced from my intraday perspective that a pullback really was in progress…
However, had I been operating from the swing trade point of view I am now including, I would have entered a long position somewhere around 0.7571, and perhaps still been in the trade at 0.7596 given the fact that at Friday’s close, the immediate bias was beginning to evidence signs of wanting to turn bullish to rejoin the ultimate bias, whose sentiment is technically still positive.
In any event, at this point I will be watching
AUDUSD for confirmation of a commitment to head north going forward, and if received, will enter a long position in pursuit of a minimum 25-pip gain, if not
much more!
Similarly,
EURJPY,
EURUSD,
GBPJPY,
GBPUSD and
USDJPY are
also all evidencing a bullish ultimate bias, but a bearish immediate bias that might reverse sentiment soon. However, none of them have fallen enough at this point to make them attractive structurally as such prospects, so I would either like to see their rates drop a little bit farther, or will be exercising extreme caution regarding if, when, and where to buy any of these pairs in the near future.
In most cases their immediate bias has been bearish for at least 24 hours, so I am not looking to enter any short positions here at this point. For that, I would need to wait for their rates to continue crawling southward to such a degree that they begin to sway the ultimate bias in the same direction, at which point, I would have to start looking for opportunities to execute trades in the direction of the
new bearish
overall trend.
EURGBP and
USDCAD are in similar situations, but are not trending well at all in my opinion, so I am inclined to maintain a hands off attitude with respect to these two pairs at the moment.
USDCHF is the only pair on my watch list whose ultimate bias is currently bearish. Hence, from a swing trade perspective, its climb to about 0.9887 would have been quite a sweet opportunity to enter a short position. But having not yet adopted such a viewpoint at the time, I am now forced to wait for the immediate bias to resume a bearish sentiment before entering a short position, or to wait for the “whole works” to turn north before buying.
