From the high yesterday of 1.3679 the pair has dropped to a low of 1.3492 so far today. This is still a support area but it's quite a bit below the confirmed double bottom price of 1.3591. It doesn't look as though the pair is going to get above 1.3692, the high Monday.
1.3467/77 is a strong support area for this pair. It's .618 of the move up from 1.3267 to 1.3692 as well as being the location of the 21 SMA on the daily chart. Just below from 1.3430 up is strong price support going back to 2009. If it begins to drop below, I'd sell (my long will be profit stopped out at 1.3463). On the other hand if the current candle forming on the chart makes a hammer, I may add to my long.
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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