US Market Open: European cash markets kicked off the week lower across the boardFull noteEuropean cash markets kicked off the week lower across the board with a relatively broad-based performance seen across the majorsTwitter is reportedly re-examining Elon Musk’s bid in which a potential deal could be made as early as this week, WSJ sourcesStateside futures are lower in tandem with the broader market sentiment, whilst the NQ is slightly more cushioned by the earlier decline in yields.DXY set a new 2022 peak at 101.750 amid safety flight and a sharp slide in crude alongside other commoditiesFrench President Macron won the second round of the Presidential Election with 58.6% of the vote vs Le Pen at 41.4%.Looking ahead, highlights include a Speech from ECB’s Panetta, Earnings from Activision Blizzard, Coca-ColaEUROPEAN TRADE EQUITIES European cash markets kicked off the week lower across the board with a relatively broad-based performance seen across the majors.Sectors are lower across the board with a clear defensive tilt: Energy and Basic Resources sit at the bottom of the bunch amid hefty downside in underlying commoditiesStateside futures are lower in tandem with the broader market sentiment, whilst the NQ is slightly more cushioned by the earlier decline in yields.Twitter is reportedly re-examining Elon Musk’s bid and be more receptive to a deal with the sides meeting on Sunday to discuss the proposal. It was separately reported that Twitter is facing increasing shareholder pressure to negotiate with Elon Musk in his takeover bid and that the Co. is in talks with Elon Musk in which a potential deal could be made as early as this week, according to WSJ.Twitter (+0.7% pre-market) is reportedly re-examining Elon Musk’s bid, via WSJ.FX DXY sets new 2022 peak at 101.750 amid safety flight and sharp slide in crude alongside other commodities.Yen back in favour as risk sentiment sours irrespective of denials about joint Japanese and US intervention discussion – Usd/Jpy towards base of 128.87-127.89 range.Aussie underperforms on Anzac Day due to steep decline in copper and iron ore – Aud/Usd tests 0.7150 and Aud/Nzd cross under 1.0850 vs 1.0940 at one stage overnight.Yuan extends depreciation as Covid spreads to a district in Beijing and PBoC continues to lower Cny midpoint reference rate – Usd/Cnh just shy of 6.6000, Usd/Cny eyeing 6.5650.Euro averts 1.0700 test, narrowly, and pares more losses after surprisingly upbeat Ifo survey, on the surface – Eur/Usd rebounds to circa 1.0750, but still well below Macron victory high.Pound loses Fib support on the way through 1.2800 and sub-8400 vs Dollar and Euro respectively.FIXED INCOME Debt futures firm as risk appetite wanes, but bonds fade beyond 154.50 in Bunds, 119.00 in Gilts and 119-25 in the 10 year T-note.Core EZ bonds lose momentum after German Ifo survey beats and irrespective of less encouraging accompanying statements.French OATs off peak within 147.38-146.28 range posted on confirmation of Macron defeating Le Pen to retain Presidency.European Commission sells EUR 2.499bln (exp. EUR 2.500bln) 0.4% 2037 NGEU; b/c 2.05x (prev. 1.49x), average yield 1.626% (prev. 0.375%).COMMODITIES WTI and Brent June contacts have continued to decline since the resumption of futures trading.Spot gold has been caged to a near-USD 5/oz range since the European open as the impact of a firming Buck negated the effects of lower yields at the time.Base metals are in a sea of red as China’s lockdown woes hit the demand side of the equation – with LME aluminium and zinc the laggards at the time of writing.NOTABLE HEADLINES French President Macron won the second round of the Presidential Election with 58.6% of the vote vs Le Pen at 41.4%, while Le Pen conceded defeat after the initial projections, according to Reuters and Sky News.ECB President Lagarde commented that interest rate hikes will not lower energy prices, according to Barron’s.ECB policymakers are said to be keen to finish bond purchases as soon as possible and possibly hike rates in July but no later than August, while they are leaning towards two rate moves this year with three also a possibility, according to Reuters sources. However, an ECB spokesperson declined to comment on the timing of ending bond purchases and potential interest rate increases.The EU is said to prepare the creation of a new trade and tech council with India, according to FT sources. The new forum could be unveiled on Monday during the European Commission President’s visit to India.The EU will aggressively police online content from Big Tech platforms such as Google (GOOG) and Meta’s Facebook (FB), according to the FT

UK CBI Data:Business Optimism: -34 (Forecast -15, Previous -9)Orders:14 (Forecast 22, Previous 26)More like Business Pessimism.. AMIRITE??Anna Leach, deputy chief economist at the CBI, said manufacturing orders and output continued to grow, albeit at slower rates and the war in Ukraine was exacerbating COVID-related supply problems.“It’s little wonder that sentiment has deteriorated sharply over the past three months and manufacturers are now scaling back their investment plans,“ Leach said.Sterling just can’t catch a break. Currently down 0.9% on the day.

This
article is devoted to a special tech analysis pattern in Forex
and the stock market that can be found on a good half of reversals of trend and
correctional movements from M1 to MN. However, right because of this frequent
emergence, the main task of a trader is to distinguish between a Failure Swing
that will bring them a profit with more than 50% probability and a mock Failure
Swing.

Description
and examples of Failure Swing

A
bearish Failure Swing is a double top, the second peak being lower than the
first one. A bullish Failure Swing is a double bottom, the second bottom being
higher than the first one.

Here
are some simple examples:

The
idea of the pattern is that the shorter second part of the pattern demonstrates
such a low market interest to the preceding movement that market players do not
even want to test the tip of the first peak or bottom.

Nonetheless,
classically speaking, an uptrend is considered in action when its highs and
lows increase consecutively; similarly, a downtrend is considered acting when
the lows decrease one after another. However, when a bullish Failure Swing
appears with an increasing instead of decreasing high, this means that the
downtrend is at least slowing down.
And when the price break through point 2
from below, the trend is considered ascending. With a bearish Failure Swing,
the situation is the same: when the bottom point is broken through from above –
the trend is already considered descending. Of course, all this is just
hypothetical, in Forex as well as in the futures or stock markets. Any trading
signal is hypothetical. The trader’s task is to make the probability come true.

Requirements
to a highly probable Failure Swing

For
a Failure Swing to be able not only to slow down the movement in which it has
appeared but also to really push the price in the opposite direction, the
pattern needs time. Particularly – no less than 30% of the time that the
preceding uptrend or downtrend took to develop.
However, the time can work
either on generating force for a reverse movement or banal consolidation for
going in the previous direction. So, a highly potential pattern must demonstrate
changing dynamics of price
movements.

As
for a bearish Failure Swing, the price must drop as fast as possible from high
1 to low 2, while the incline from low 2 to high 3 must be as slow as possible.
And from high 3, the price must start falling again very fast and confidently,
closing the candlestick on the working TF under low 2. As soon as this happens,
a bearish Failure Swing is considered complete.

For
a bullish Failure Swing to have high potential, the price also needs to grow
from point 1 to point 2 as fast as possible, while the decline from point 2 to
point 3 must be very smooth. From point 2 to point 3, the price must grow
steeply, confidently closing the candlestick above point 2. After this, the
bullish Failure Swing is considered complete because the price movement hereafter
complies with a classic uptrend.

In
most cases, the angles of lines 1-2 and 2-3 will be equal often the trend
reverses at line 2-3. However, line 2-3 must never have a sharper angle than
line 1-2. And from point 3, the price must always go confidently in the target
direction and always at a sharper angle than line 2-3 has.

Signal
to buy

The
signal appears as soon as you notice a highly potential pattern complete. Enter
a buying position as soon as the candlestick closes above the level of point 2.
However, if the candlestick closes high above point 2, place a Buy Limit order
a bit higher than the broken top because in highly potential Failure Swings,
the price seldom drops lower. Example of a signal to buy:

Signal
to sell

It
appears as soon as the candlestick closes under the level of point 2 of the
signal pattern. If the candlestick closes deep under the level of point 2, you
can place a Sell Limit order a couple ticks under it or at the level of point
2. Example of a signal to sell:

Stop Loss and
Take Profit

Trading
by the Failure Swing, the initial Stop Loss should be placed behind point 1. If
you are selling, mind the spread. The SL can be moved after newly emerging
extremes while the price is approaching the Take Profit. While the trader
should not wait long, moving the SL to the breakeven, using each new extreme,
when they will trail the position they should always keep in mind that the
market will need time to consolidate powers for a new movement.

As
for the TP, the trader can do without it, using their position trailing skills.
However, trading in Forex or the futures market, I would recommend using a Take
Profit. I checked the EUR/USD chart over 14 months for
Failure Swings that could be used and decided that on H1 I would not have
placed any TP at all if it had to be to times larger than the SL. As for
trading Failure Swings on the same pair, M5, over 11 months, I decided that an
optimum TP should be no more than 3 sizes of the SL. Alternatively, choose the
TP size based on your experience.

However,
in the stock market, trailing positions can be more efficient than a stiff TP.

Money
management

Trading
Failure Swings, the trader can choose between risking fixed percentage of the
deposit or risking the same lot. I presume that any trading signal has the same
chances for success and failure, that is why I recommend risking fixed
percentage of the deposit. It should be no more than 2%, and when you are still
learning – no more than 1%.

Example
of trading:

I
made an in-depth study before writing this article and concluded that trading
Failure Swings can bring a profit. However, for this probability to become
real, the trader should choose a comfortable TF and be very picky, choosing
candidates for profitable signals. Thus they will minimize risks.

By Analytical Department at RoboForex.

The awesome CN Wire notes that..China’s cabinet: Will further promote release of consumption potential and sustainable recovery of consumption. Will guide financial system to supprot real economy through various measures such as lowering interest rates and reducing fees.Will steadily increase mass consumption such as automobiles. All regions shall not add new automobile purchase restriction measures.Regions that have implemented automobile purchase restrictions will gradually increase number of automobile increment quotas and relax qualification restrictions for car buyers.Will make overall use of existing financial funds to support construction of consumption-related infrastructure. Will include eligible projects in scope of local govt special bonds, so that investment can be better used to boost consumption.~ with China seemingly regressing back to lockdown mode (did it ever progress out of it??), you have to believe that govt support measures will only become more pronounced.