EURUSD—rallying

The pair has bounced from the Thursday low of 1.3267. In doing so it took out my short from 1.3533 which was profit stopped at 1.3434 for +99 pips. After stalling Friday around the 1.3407 level it has stalled again at 1.3506, a bit below previously identified resistance. It looks like it's going to make another run at that level. At the bottom of its channel on the three-hour chart, it may be worth a small long.

Frankly, I'd expect lower lows from this pair from a variety of price target calculations and from cycle analysis. Until it cleanly closes above 1.3569 (the high prior to this last move down), it looks bearish. Clean means it stays above that high for the week. If it does this, then my former price objectives of 1.3853 and 1.4039 will come back into the realm of possibility.

Support is at 1.3436 (bottom of channel), 1.3377, 1.3325, 1.3267, 1.3209, 1.3200, 1.3127, 1.3092, 1.3000, and 1.2885. Resistance is at 1.3506, 1.3556, 1.3580/93, 1.3647, 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.