The weekly chart hints at some impressive resistance. First, the pair is bumping up against a downward sloping trend line. Intersecting that is polarity (a price level that has served as both support and resistance in the past). So 1.08 to 1.10 may be difficult. Expect some chop. You can trade chop but you need to be quick—getting in on pullbacks and getting out at minor resistance or selling at rallies and getting out at minor supports. Given the overall downtrend, it might be safer taking short term sell positions. I expect that both long and short opportunities will present themselves on the shorter time frame charts. Here’s the weekly chart:
On the 3-hour chart you can see the uptrend and it’s possible to see a fairly clear Elliott Wave (EW) count. It’s not absolutely certain wave 3 is over—the pair could be extending within wave three. Fie on the divergence! If wave 3 is ending then wave 4 will be a correction and could provide another buy opportunity at the 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.
