EURUSD—attempting to rally yet again

Both my longs from yesterday stopped out at breakeven. Hmph. The Euro has dropped to a low of 1.3648 so far today and is attempting a rally. It's possible it won't get much beyond 1.3700/25 before turning down again. As a result, selling in that area might be the way to go with a tight stop.

I'm disappointed in Euro. So far it has failed to make my first price target of 1.3853 by 35 pips and didn't get close to the second one at 1.4039. However, as I wrote last Friday, there's a strong confluence zone in the 1.3651/97 area. This is the third test of this area since March 11. So there's still a possibility. If it does continue up, then expect it to try to get through yesterday's 1.3818 high again. The key here is to watch momentum and candle behavior carefully as it approaches 1.3700/25 for shorting and then, if that doesn't pan out, look to buy a pullback. It may be best to sit this one out because there are some conflicting signals. Looking at the 3-hour and daily charts, one could make an argument for basing.

Resistance is at 1.3700, 1.3729, 1.3780, 1.3818, 1.3839, and 1.4026. Support is at 1.3648, 1.3600, and 1.3538/51.

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.