My long at .8703 stopped out at .8675 for – 28 pips. I then went short at .8679 where I have the stop at breakeven. Now, of course, it's waffling, having pulled back from a low of .8656 this morning. This is a support area so I'm not willing to take a lot of risk on the trade. With both the Euro and the pound weak, it's possible this pair will stall.
Looking at the daily chart one can see the pair is nudging the bottom line of its triangle, suggesting there may be room for further lows now that it broke the .8700 level. As I wrote yesterday, .8700 was a tough resistance price for the pair for much of the summer of 2009. In Jan/Feb of this year, the pair dipped to .8603 and then hovered at support of .8660 or so for much of that period. I also still have a price target of .8580 for this pair from other calculations. The calculated target based on the triangle it has been coiling within is much lower, obviously, but I'm not sure how realistic that is, at least at the current time.
Support is at .8660, .8603, .8500, .8456 and .8400. Resistance is at .8700, .8744, .8865, .9026 and .9130/50.
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.
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