Wednesday, March 24, 2010

EURUSD—testing new lows

Euro finally started to move downward. The buying that came in around 1.35 yesterday wasn't enough to stop its slide nor to create a very strong rally. The little rally did take out my short from 1.3550 at breakeven but I added another short at 1.3533. My short from 1.3686 is also still on although I just took most of it off the table for +250 pips.

So far this morning the pair has hit a low of 1.3365. Breaking below the psychological 1.34 is not great news to, well, I was going to say to Euro bulls, but are there any left? Although that reminds me that once everyone has sold who can sell, who is left to sell? Regardless, there's still lots of negative sentiment left and sellers will probably be found at least until down to 1.30. A close below 1.34 today would be damaging. Don't expect a straight down fall—rallies, even if small, will present themselves. There's some positive divergence shaping up on the shorter-term charts. Continue to sell those rallies for now. As I wrote yesterday, price targets from various calculations are coming in at the 1.27 to 1.30 price levels.

Support is at 1.3360, 1.3300, 1.3263, 1.3209, 1.3200, 1.3127, 1.3092, 1.3000, and 1.2885. Resistance is at 1.3406, 1.3435/50, 1.3561, 1.3486, 1.3561 1.3590, 1.3661, 1.3724 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.

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