Yesterday, I wrote that the one hour chart one showed some bearish and indecisive candles as well as a break of a short term trend line in price and RSI. “You can learn a lot just by watching,” Yogi Berra said. I agree. Euro reached a low of 1.4883 from the high of 1.4995. The ones who bought at 1.4995 (and there were some) are probably most unhappy.
What do things look like now? The hourly chart shows it didn’t quite reach the upward, short-term support line. This might be bullish but it hasn’t bounced off with great exuberance. On the plus side, the RSI hasn’t dropped too much. Notice the proportion of the tops under each small arrow. If there’s a third one, it may indicate more weakness and would hint at a correction. That would support my Elliott Wave count yesterday—that the overall move from March is a corrective wave two with an ending diagonal. If the pair dipped to 1.45 there’s reason to buy (the 13 EMA on the weekly chart, which the pair largely respects, is at 1.4543). But we’re “livin’ in the future,” as the Boss sings on his Magic CD. All I can do this minute is watch. If it drops below the trend line, I’ll be observing candles and lower time frames. If it breaks above and definitively closes over 1.50, then it may be a buy. Here’s the hourly 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.