This pair fell back from its high of 1.7037 yesterday and I wrote then that since it had been in a range of 1.6118 to 1.7113 since mid-September, this was an area to watch for shorts. It has faltered and I closed my long this morning at 1.6965 for +223 pips. I then took a short position at 1.6958. I have just moved my stop to breakeven when it dropped 40 pips.
This is simply a range trade, selling at or near (in this case) the top of the range. The march of candles up still looks bullish to me (not a lot of upper shadows on them, just resolute white candles). This little pullback could only be relieving the overbought pressure so we’ll have to see if this reaction has any legs. A close below 1.6880 would be encouraging.
Here’s the daily chart:
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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.