The pair has its boosters who clearly want it to go up which is why it doesn't seriously fall. On the other hand there are enough naysayers out there that keep successfully holding the pair back. For the last three days the highs have been .9027, .9036, and .9018 respectively. Of course, it could still climb higher than .9018 since the day isn't over yet.
My sell order at .9055 obviously wasn't hit. I just took a small short position at .8998. Terrific price as far as being able to place a tight stop. But why short if it's at the bottom of a channel? That's a reasonable question and I normally wouldn’t do so except that the line has been penetrated and the pair has not shown any real energy in bouncing off of it and there is enough weakness in the pair as evidenced by EW counts and other calculations to suspect it may fall. But that's conjecture which is why one only wants to go in one can have such a tight stop as this offers.
If the pair manages to overcome yesterday's .9036, there's a chance it could go to .9155 (the top of the channel). From there it wouldn't be much further to .9200 but between .9144 and .9193 there is all kind of resistance from confluence to prior trend lines to a rather persuasive speed line from March 2009 lows. I suspect it would fall back sharply. That's why I have another sell order at .9155. If, by chance, it didn't fall back, sharply or otherwise, there's always that juicy November high at .9406 to go after. As if!
Support is at .8938, .8847, .8814, and .8578. Should she begin to approach those levels, there's an entire abyss down there.
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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