EURUSD—lethargic

My last short position from Friday (taken at 1.3677) profit stopped out on Friday at 1.3586 for + 91 pips. These are terrible markets if you're anything but an extremely short-term trader trading on small time frames. However, the market won't stay this way forever.

The Euro hit resistance this morning at 1.3683. I shorted at 1.3653. I'm not overly optimistic about this. The pair is lethargic and the divergence with RSI on the daily chart reflects the loss of momentum for downward movement. That said, it was just repelled by the top of the short-term upward channel on the three-hour chart. In addition, the downtrend line from the January high of 1.4579 is coming in at 1.3680. This should offer decent resistance. On the other hand, there's quite a bit of near-term support down to 1.3532. If the pair can break below that, then the downtrend should resume.


Support:

1.3605
1.3582/88
1.3532
1.3485
1.3405
1.3361
1.3263
1.3000

Resistance:

1.3680
1.3700/35
1.3801/41
1.3900

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.