Friday, January 22, 2010

EURUSD—what next?

The Euro reached a high of 1.4165 in early morning trading (EST). During the current hourly candle, it has reached 1.4167. As I wrote yesterday, the 1.4150/70 area is resistance. If it makes it through this resistance, then the next likely targets are 1.4215 and then 1.4285/90, the bottom of the flag it so ingloriously fell out of Wednesday. At that point, I plan to add to my short position. Should the pair resume its fall, support is at 1.4029 (yesterday’s low). Next supports are at 1.4088, 1.3925, 1.3833, and 1.3748. I did an Elliott Wave count on the daily that suggests we’re at the start of wave 3 of 3. If so, the Euro could be in for some rather heart-stopping drops. A rise above 1.4579 would invalidate that interpretation.

Here’s the 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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