EURUSD--bounce

Euro's overnight low was 1.3284, a level from which it has nicely bounced. It is now back up to what was former support in the 1.3360 area. 1.3402 will be the 50% retracement level from the 1.3569 high to 1.3284 so it's in an area where one can expect stalling before a clear direction emerges. There is some bullish divergence beginning to form on the three-hour chart. What would be ideal is a healthy rally, perhaps to 1.3425/1.3500 along with an overbought condition on the hourly chart. If it started to stumble and fall out of overbought, it could be a nice short since price targets from cycle and other analysis haven't yet been met.

Yesterday afternoon, I took profits on what was left from my short at 1.3686 at +365 pips. I still have a short on from 1.3533 and that will stay in play as long as the above mentioned 50% retracement caps any rallies.

Support is at 1.3284, 1.3209, 1.3200, 1.3127, 1.3092, 1.3000, and 1.2885. Resistance is at 1.3360, 1.3402/09, 1.3425, 1.3535, 1.3561, 1.3670, 1.3724, 1.3755 and 1.3818.

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.