Thursday, April 22, 2010

EURUSD—weakness continues

Euro is threatening its low so far this morning of 1.3332 and in getting here broke through any 1.3350 option barriers. Now, of course, it's not that far away from the 1.3283/67 lows.

I took partial profits from my short from 1.3453 at 1.3377 for +76 pips and the remainder profit-stopped out at 1.3413 for +40 pips. I had added a short yesterday at 1.3392 and that trade currently has a stop at better than breakeven.

If you're not already short this is probably not the place to jump in. The pair is obviously trying to base and it seems clear there was buying at the 1.34 level although not enough to get a rally going yesterday. I'd expect to see more buying the closer it gets to 1.33. There's a short-term uptrend line coming in at 1.3313 from March. That said, the pair has been weak all week and it's curently below last week's low of 1.3472. Unless a serious bounce takes place it's looking at a lower low and lower high this week. The positive divergence that existed on yesterday's three-hour chart is working its way out without a rise in price. The last completed three-hour candle was very bearish with not much in the way of an upper or lower shadow.

Support is at 1.3313/07, 1.3283 and 1.3267. Resistance is at 1.3366, 1.3422, 1.3447, 1.3525, 1.3585/91, and—glory days—the April 11 high of 1.3692.

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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