Tuesday, February 23, 2010

GBPUSD—maybe it can't rally

I woke up early this morning and saw my trade from yesterday was nicely up, moved my stop to breakeven, and whammo! Out it goes in an overall drop that many of the pairs engaged in. This is not what I was expecting although the pair is weak overall.

I wrote yesterday about the weekly chart. I got ahead of myself when I wrote the weekly chart was showing a star. What I meant to write was that if the current week continues in this vein it would be a star that could lead to a morning star. It still could do that but of course one must wait for the week to conclude before it's definite. However, I'm still seeing the recent low of 1.5348 as iii in the wave count so I'd still expect a bounce. If that low is taken out then obviously I'm incorrect.

The pair broke its .382 retracement of the rise in 2009 when it fell through 1.5701 as well as that being a round number and 1.5708 being the October low. The 50% retracement is at 1.5276. If we don't get a bounce today then surely we'll get one when the pair approaches that price.

Today's high was 1.5576. It's possible it will still rally but if it does the first thing it needs to do is retake the short-term hourly uptrend line at 1.5478.





Here’s the one-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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