The pair reached a high of 1.3963 before falling back a bit and it looks as though the psychological number of 1.40 may be tantalizingly out of reach. However, while short sellers are coming in, one needs to be careful. For one thing, there's still the chance of Swiss bank intervention, which is sort of becoming like the elephant in the room but there you go.
It still appears unlikely to me that this strong down trend is going to reverse upwards. Currently, it's being held back by the 1.40 psychological and prior support as well as a short-term downtrend line.
But my long from 1.3787 is up 143 pips and is profit-stopped, I had a nice little profit on my other long this past Friday, so I'll sit tight for now. I am quite happy to reverse on this pair should momentum, as represented by RSI, begin breaking down.
Resistance is at 1.3963, 1. 4000, 1.4044, and 1.4179. Support is at 1.3870, 1.3816, 1.3774, and 1.3734.
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.