EURUSD—How much longer is this going to last?

I finally shorted the Euro after I blogged yesterday, picking up some pips, but I closed and went long after the dip near support appeared to hold. The support was also at polarity, a level that has served as support and resistance in the past. Finally, the pair’s RSI was also climbing out of oversold. All reasons to go long so who am I to argue?

The pair fell out of its “broadening” formation that I wrote about yesterday, before its completion. I suspect it will find resistance at the lower line of that formation and plan to lighten my long there if not close it entirely. I may even short. If it makes it back into the pattern, I still believe the pair has formed a top and will turn again. But regardless of my “belief”, the pair is in an overall uptrend that has not yet been definitively broken—the daily uptrend line from March is coming in at around 1.4750. This was the reason I bought on the dip. 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.