The Euro dropped to 1.3435 early this morning. No doubt this was a heart-stopping level for many Euro bulls. The bears must have been delighted, at least until the pair bounced.
The remainder of my short from yesterday (at 1.3623) profit stopped out at 1.3567 for +56 pips. I went long this morning at 1.3496. Why, if I'm bearish on the pair, did I do so? The first reason is that prices don't drop straight down as I've written many times. In addition, a look at the weekly chart shows that the lows the last two weeks have been 1.3444 and 1.3451. This morning's low of 1.3435 looked as though it was holding so clearly there is support in this area. One could reasonably expect a bounce. On the hourly chart, one could see a beautiful, classic hammer candle. This, combined with being at support, often results in a reversal. Finally, there's bullish divergence on the one-hour chart.
It's currently up 62 pips (7:34 AM EST) and is profit-stopped. I may take some partial profits soon, especially as it nears 1.3586. I'll obviously be watching it closely. Resistance is at 1.3580, 1.3600, 1.3654, 1.3692, 1.3726, and 1.3788. Any of those look to me like good shorting levels. Support is 1.3434/51, 1.3405*, 1.3300 and 1.3247.
Here's the hourly 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.
The remainder of my short from yesterday (at 1.3623) profit stopped out at 1.3567 for +56 pips. I went long this morning at 1.3496. Why, if I'm bearish on the pair, did I do so? The first reason is that prices don't drop straight down as I've written many times. In addition, a look at the weekly chart shows that the lows the last two weeks have been 1.3444 and 1.3451. This morning's low of 1.3435 looked as though it was holding so clearly there is support in this area. One could reasonably expect a bounce. On the hourly chart, one could see a beautiful, classic hammer candle. This, combined with being at support, often results in a reversal. Finally, there's bullish divergence on the one-hour chart.
It's currently up 62 pips (7:34 AM EST) and is profit-stopped. I may take some partial profits soon, especially as it nears 1.3586. I'll obviously be watching it closely. Resistance is at 1.3580, 1.3600, 1.3654, 1.3692, 1.3726, and 1.3788. Any of those look to me like good shorting levels. Support is 1.3434/51, 1.3405*, 1.3300 and 1.3247.
Here's the hourly 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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