I have two long positions—one from .8175 and one from .8583. I took partial profits at +455 pips yesterday afternoon on the position from .8175. Both are obviously profit-stopped so there are no worries on my part.
Since it confirmed the double bottom at .8551 the price target is a hale and hearty .9035. I find that unlikely, at least in the near-term for several reasons. If you look at this pair on a daily chart, it's clear it cannot maintain this angle of ascent. In fact, on the daily chart it looks as though it could be tracing out an ABC correction with the C leg being currently a bit greater in length to the A leg. If C was to become 1.61 of A then the pair could get to .8861 before turning back down. If I saw that, along with a another failure of RSI above 70 on the hourly chart, I'd be confident enough to take a good-sized short position. We'll see. But for now, as I said, I'm still long.
The pair has been in a narrow range since yesterday. It will break out of this eventually.
Resistance is at .8658/67, .8707/28 (50% of the .92390 to .8067 move, polarity, and a fibonacci calculation of price target based on corrective wave behavior), .8800, .8897, .9000, and .9035.
Support is at .8594, .8551/46, .8495/88, .8426, .8400, .8364/56, .8258, .8195, .8133, .8082 and .8067.
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.