Flipping through charts this morning, I was taken by the EURGBP. If you look at the daily chart you can see the sharp rise that reached .9805 and then dropped sharply to a low of .8400. In September I wrote about how the pair had left a simple quadruple top on my point and figure chart (P&F) and I posted the chart. This entry is at http://forexreflections.blogspot.com/2009_09_13_archive.html
The pair rose to .9412 earlier this month and has dropped from there. The price objective I calculated from the P&F chart was .9420. It didn’t quite make it but that’s close enough.
When you look at the daily chart you can see the drop, the leveling off, and finally the turn upwards. I couldn’t draw a rounded line but if I could you’d see the rounded bottoming which usually signals diminished selling. It hesitated at the downtrend line which is not unusual (these can serve as resistance just as horizontal lines can), then smartly rose above and has pulled back. Now what? It’s possible it could rise to its highs again if sentiment stays bullish toward the Euro (key word there is “if”) and bearish toward the GBP. However there’s no way to know that right now.
What caught my eye this morning was the pennant on the daily chart along with price near an upward sloping trend line. This is in conjunction with the general rounding you can see on the condensed chart. It might be worth a buy in the .8940/9000 range. Had I been awake earlier this morning I would have bought the slight dip. I wasn’t. Now I’ll just keep an eye on it on the shorter time frame charts.
Be aware that if you do go long this pair you need to be patient. Its average true range (ATR) is a skimpy 89 pips a day, although it has turned up a bit lately. In order to determine if a buy is worth while one would also have to study the shorter term charts. Here are both the condensed daily chart and an expanded one to better show the up-sloping trend line.
The pair rose to .9412 earlier this month and has dropped from there. The price objective I calculated from the P&F chart was .9420. It didn’t quite make it but that’s close enough.
When you look at the daily chart you can see the drop, the leveling off, and finally the turn upwards. I couldn’t draw a rounded line but if I could you’d see the rounded bottoming which usually signals diminished selling. It hesitated at the downtrend line which is not unusual (these can serve as resistance just as horizontal lines can), then smartly rose above and has pulled back. Now what? It’s possible it could rise to its highs again if sentiment stays bullish toward the Euro (key word there is “if”) and bearish toward the GBP. However there’s no way to know that right now.
What caught my eye this morning was the pennant on the daily chart along with price near an upward sloping trend line. This is in conjunction with the general rounding you can see on the condensed chart. It might be worth a buy in the .8940/9000 range. Had I been awake earlier this morning I would have bought the slight dip. I wasn’t. Now I’ll just keep an eye on it on the shorter time frame charts.
Be aware that if you do go long this pair you need to be patient. Its average true range (ATR) is a skimpy 89 pips a day, although it has turned up a bit lately. In order to determine if a buy is worth while one would also have to study the shorter term charts. Here are both the condensed daily chart and an expanded one to better show the up-sloping trend line.
© Dianne Fecteau, 2009. No part of this material may be reproduced in any form, or referred to in any other publication, without the express written permission of the author.
My purpose in writing this blog is to show you how one trader, me, makes trading decisions and survives while trading Forex. One of the biggest problems I had when I first started trading was trying to apply the “rules” to actual trades. Another was the psychology—limiting losses and letting profits run. If you study my blog you’ll see how I deal with both those issues. So my writings are not trade recommendations but rather educational in purpose. You have to decide on your own approach to trading. Remember that trading is risky.
My purpose in writing this blog is to show you how one trader, me, makes trading decisions and survives while trading Forex. One of the biggest problems I had when I first started trading was trying to apply the “rules” to actual trades. Another was the psychology—limiting losses and letting profits run. If you study my blog you’ll see how I deal with both those issues. So my writings are not trade recommendations but rather educational in purpose. You have to decide on your own approach to trading. Remember that trading is risky.
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