GBPUSD is hovering in a narrow range for the last several hours, resting, one supposes, from its feverish rise from yesterday’s low of 1.5921 and Tuesday’s low of 1.5708. Currently, it’s at 1.6270 and still over-bought.
With little action and since it blew easily past all near term resistance levels, I decided to look at the monthly chart. Monthly charts help put “big” moves in perspective. Looking at the chart you can see it fell from a high of 2.1104 in 2007 to 1.3655 in March of this year. What a drop! Its high this summer was 1.7072, not even 50% of the drop. For the last four months it has ranged from 1.5707 to 1.7072. With a high today of 1.63 it achieved just over 50% of this range. One wouldn’t be shocked to see it get back to the top of the range but right this moment there’s little in the way of clues as to whether it’s going to attempt that. Also note that it fell beneath its uptrend line last month and hasn’t yet recovered. It has edged just above a symmetrical triangle on the hour chart. Future movements may depend on USD’s performance. Here’s the monthly chart:
Speaking of the USD, I bought USDCAD this morning at 1.0255. Why, someone that was even reasonably well adjusted might ask since everyone knows the USD is a loser. And it has no friends, either, it seems, certainly no friends in high places.
A look at the three-hour chart shows quite a respectable drop from the September 28th high of 1.0993 to a low of 1.0208. I went to the long term charts after that drop as well and found I really liked that low. It has paused there before, both going down and going up. That means I can have a tight stop. What else. On the three-hour chart I saw bullish divergence. I also liked the way it bounced off the bottom on the next candle. On lower time frames than this, I noted a rounding pattern which is generally bullish—it tells me selling has slowed. So here I am, up 80 pips or so and my stop set at a small profit. It’s sputtering a bit, now. Again, let’s see what tomorrow brings. Here’s the three hour chart.
A look at the three-hour chart shows quite a respectable drop from the September 28th high of 1.0993 to a low of 1.0208. I went to the long term charts after that drop as well and found I really liked that low. It has paused there before, both going down and going up. That means I can have a tight stop. What else. On the three-hour chart I saw bullish divergence. I also liked the way it bounced off the bottom on the next candle. On lower time frames than this, I noted a rounding pattern which is generally bullish—it tells me selling has slowed. So here I am, up 80 pips or so and my stop set at a small profit. It’s sputtering a bit, now. Again, let’s see what tomorrow brings. Here’s the three hour chart.
© 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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