Friday, January 22, 2010

USDCAD—through the 1.0525 resistance

Is this pair finally tired of mucking about at the bottom of the pond? Alas, it’s too early to say but it’s in a nice little climb this morning and has broken through the resistance at 1.0525. My long from 1.0256 is currently (7:51 AM EST) up 284 pips at 1.0540. In general, though, there’s quite a bit of resistance ahead at 1.0580/95, 1.0626, and 1.0747. Support is at 1.0465, 1.0414, 1.0336 and 1.0292 (heaven help us if it goes back there).

You can see on the three-hour chart that it dropped from overbought readings on RSI and is now pushing back there. This hints at good momentum. The drop overnight also resulted in a less steep trend line. This is positive because the steeper the trend line, the more difficult it is to maintain it. However, I still consider this trend line too steep so a bit stronger reaction would be positive. This would also provide an opportunity to add to my position depending on what price action looked like at that time.

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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