This morning, though, it reached a high of 137.97. It then, a few moments ago, retreated slightly to 137.47. I took another long position at 137.50. If you look at a daily chart you can see it looks as though it may be heading for the top of a channel.
If it makes it there (139.58), then it's a good level to try a short because not only will the pair meet the channel line but it will also encounter polarity. However, I doubt this is going to be a smooth ride up. It is already encountering resistance from the 34 daily EMA and 138.19 and various fib confluence levels. There is more resistance at 138.61 and especially 138.96.
Some people say this pair, fondly known as the Guppy, is equivalent to Mr. Toad's Wild Ride. Maybe, but the key to trading it seems to be to stay flexible. Don't get wedded to a mindset. Go where it takes you. This is why you want to keep stops tight, take your small losses (if necessary) with a smile, and be willing to reverse.
Support is at 137.25/14, 136.92, 136.55, 135.19, 134.53 (strong), 133.93, and 132.03. Resistance is at 137.97/138.00, 138.52/61, 138.96 (strong), 139.58 (strong), 140.57, and 142.64 .
Here's the daily 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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