Tuesday, May 11, 2010

EURUSD—near support

I took some partial profits from my short from 1.2996 at +303 pips as the Euro has continued to drift lower. Yesterday's close at the bottom of the daily range was bearish. The pair reached down to 1.2667 today. However, a short-term uptrend line can be drawn from the 1.2516 low to 1.2667 which has a rather nice angle on the hourly chart. Perhaps it can hold above this line. If not, it may drift back down to the low 1.25 area and if it breaks that then 1.2456 (the March 2009 low) is in sight. At that point you'd see some sort of rally. The 1.25 area is good support going back many years. On the monthly chart below you can see it served as a magnet line between 1983 and 1997. And remember the words of the French finance minister from yesterday: "We will defend our currency and we won't let it be attacked by anyone." Okey-dokey.

Support is at 1.2609, 1.2586, 1.2570 and 1.2456. Resistance is at 1.2803, 1.2880, 1.2963 (Fib confluence), 1.3038 and 1.3094 (yesterday's high). Sellers will probably pile in above 1.29.

Here's the monthly chart and the hourly chart:

Hourly 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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