AUDUSD—dropped off slightly

I took a short position in AUDUSD yesterday at .9240. I've moved the stop to just better than breakeven. It's difficult to expect this to pay off with the strong trend this pair has been in but if it takes out my stop then it will be a signal to look at a long. In any case, a look at the daily chart shows a slight downward, range from the high of .9406 in November to the low of .8578 in Feb. The reason I took my short was that it was at the high. On the daily chart, RSI has broken below its trend line but price must do the same before this is very meaningful.

Support is at .9192, .9124, .9096, .9043, and .9252. Resistance is at .9252, .9330, and .9406. Note the narrow areas of support and the wider gaps between resistance levels. It would be easier for this pair to go up than down.

Here's the daily 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.