The break below the downtrend line at 1.0732 was obviously a fake out. I missed the chance to buy again as it broke back above that line so the thing to do now is to wait to see how it behaves if it approaches 1.0851 again. Signs of weakness there would be reason to short; signs of strength and a push above would make it a good place to go long.
The 1.0684/1.0722 area is a key area for this pair. The fact it bounced off 1.0700 could be good news and mean there's more strength than some believe. It has already overcome yesterday's high so let's see where it goes.
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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