Tuesday, May 11, 2010

USDCAD—narrow range

Yesterday I entered a long at 1.0256 and since then the pair has been in a narrow range of 1.0210 to 1.0288. There's a lot of indecision out there but the range will break and then we'll see a direction. Below 1.0210 (yesterday's low) is negative and I'll probably stop and reverse.

On the weekly chart (not shown) the pair broke upwards of a downtrend line and although it's edging back there it hasn't done so yet. On the daily chart the candle after the high of 1.0745 last week was what is known as a long-legged or high-wave doji. Dojis represent indecision and that's consistent with the narrow range the pair is within. The high-waved doji dampens the bullish implications of a rally which it certainly did in this case.

Support is at 1.0210, 1.0136, 1.0101, 1.0012, .9951 (the uptrend line on the weekly chart), and .9930. Resistance is at 1.0256, 1.0300, 1.0393, 1.0446, 1.0470, 1.0550, 1.0690, and 1.0745.

Here's the daily 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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