Tuesday, June 1, 2010

AUDUSD—at support

The market profit-stopped me out of all long postions from last week—the remainder of the one from .8093 for +208 pips and the ones from .8390, .8436, and .8443 at +45 pips, +17 pips, and +8 pips respectively. I just opened a new long at .8327. The low of .8285 makes a tight stop possible.

However to ignore that there is downward pressure on the pair is foolish and, as a result, one has to be ready to stop and reverse if necessary. On the other hand, pairs such as the AUDUSD have seen steep drops so a period of consolidation is possible. I don't think the pair is going back to real bullishness and I don't think parity with the USD is something we're going to see anytime soon. But it may consolidate. Should it drop below .8067, it will be deadly because .8071/67 has been a double low for the last two weeks. It's not a true double bottom because there should be some periods between the two lows but if it is significant that the market has stopped there two weeks in a row.

Resistance will be found at .8400, .8453 (hourly trendline from 5/28 and .386 of .9078 to .8067), .8551, .8573 (.386 of .9078 to .8067), and .8640. Support is at .8282,.8163, .8134, .8071/67, .8000, .7932 and .7830.

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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