I’m still short from 1.4325 and obviously profit-stopped. Target of this flag is 137.70 or thereabouts, well shy of the original flag on the daily chart target of around 1.35. As I wrote last week, I have other targets that go to 1.3370 and there’s another uptrend line coming in from the lows of late 2008 that’s currently at 1.28. All nice round numbers and all numbers that would make any self-respecting Euro bull shriek and tear at their clothing. Resistance is 1.4166 (bottom of the three-hour bear flag) and in the middle of the ongoing 1.4150/70 zone, 1.4194 (yesterday’s high), 1.4215/20, 1.4285/90, and 1.4325/40. (1.4325 is the line of the daily bear flag and 1.4334 and 1.4340 were June 2009 highs). It wouldn’t clear this, especially on a first attempt, but let’s leave that problem until it occurs.
You can’t see it on my compressed chart but the last couple of three-hour candles have had lower shadows. These hint that the pair may be rejecting lower prices. The Sysyphean struggle between Euro bulls and bears continues. A solid close below 1.4073 and better, last week’s low of 1.4029 will tip things in the bear’s favor. Next support after that is 1.3973 and 1.3888.
Here’s the three-hour chart:
© Dianne Fecteau, 2010. 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.
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