Is the French PM still unconcerned about the Euro's fall?
After dropping to a low of 1.1876, the Euro managed a rally this morning to 1.1992 (not too bad for a currency around whom are now swirling rumors of breaking apart) but it's struggling here. I have two short positions from 1.2167 and 1.2061.
Common sense says that the majority of this downward move has probably completed and there will be a rally of sorts. The Euro, as of May, has experienced six down months in a row. On the other hand, now that the 2005 November low of 1.1638 is in sight, it's as juicy a target as the 2008 high of 1.60. (Does anyone remember that?) So even if there is a corrective move (or wave) up to say 1.2453 (assuming this is a 5th wave, that would be wave two of five and can serve as a price target), the 1.1640 will still be viable. On the monthly chart, a trend line from the Sept. 2003 low of 1.0763 comes in at 1.2885 and that might also be an upside target for a rally. On the downside, a trend line drawn from the Oct. 2000 low of .8225 comes in at 1.0014. Surely the French PM will be concerned if that happens!
Resistance (both short- and long-term) is at 1.1992, 1.2080, 1.2153, 1.2216, 1.2326, 1.2453, and 1.2885. That's quite a gap between 1.2453 and 1.2885 but there's no need to calculate shorter term resistance in between those two unless the Euro can climb higher that 1.22 or so. Support is at 1.1860 and 1.1638, and 1.1500.
Here's the monthly chart (my trades don't show on this because I use a different charting package for longer term charting):
© 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.