I'm still in my long from 1.3308. With a doji on the daily chart from Tuesday, the pair dropped to a low of 1.3522 so far today, taking it below the low of earlier this week. Not good. Also bearish is that it hasn't been able to achieve its early week high of 1.3692. I'll write again what I've already written several times—you have to be careful with this pair because of the cyclical pressures on it as well as negative sentiment in general. The 1.3692 high could have been part of a wave four formation and while there may be a slight push higher (possibly 1.3656), it could then drop further, picking up its overall downtrend. If so, shorting from that level would be the right way to go.
I wrote yesterday that the double bottom at 1.3267/83 was confirmed at 1.3591. Now that it has dropped to 1.3522 is it still plausible that it might achieve its profit target from this? If so, it's going to have to definitively close above 1.3692 and soon. If you believe that's possible a long is the way to go with stops below 1.3522. Since it's currently offered at 1.3544, that's a very tight stop. But caution is the watch word. Certainly a drop below 1.3509/.3485 would be devestating to the bulls.
© 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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