EURJPY—back to resistance

The remainder of my short from 124.59 profit stopped at +20 pips as the pair headed up again in the now familiar false signal market. This market is messy. The pair held above its trendline yesterday (currently the line is at 123.62) and has reached a high of 124.87 so far today. Again, it's hesitating here so sellers must be coming in but will they be able to push it down? If so, can it drop below the rather shabby 123.26 low of yesterday? Inquiring minds want to know. The just completed candle on the three-hour chart is a doji so there are obviously a lot of inquiring minds who are quite uncertain. The hourly chart shows some negative divergence.

The pair needs watching as to whether it can get above the doji high of 124.87. If not, another short may be in the cards. If it does so with some conviction, however, the behavior at 125.00/25 will be interesting since that's quite strong resistance. Once beyond there it could reach 126.31. Support is at 124.19 (a short-term trendline), 123.62, 123.00 and 122.00.

Here’s the one-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.