EURUSD—dancing on downtrend line

Euro is dancing on a short-term downtrend line from May 10th with traders undecided which way to go. For now it's not straying far from its 50% level of its historic price range. It may stay like this until after NFP tomorrow and as long as no more bad news comes out of Europe as to debt crisis (or anything else). What was left of my short from 1.2321 profit-stopped out at 1.2259 for +62 pips. The short I added at 1.2232 stopped at breakeven. I added a new short this morning at 1.2254 because the pair still can't seem to get any traction going for a rally but I'm watching it closely. The pair is nibbling at the short-term RSI uptrend line and if price starts to get below the blue uptrend line then it may be headed back down to the 1.21 area.

Resistance is at 1. 2334/54, 1.2453, 1.2588, 1.2660, 1.2720 and 1.2803. Support is at 1.2233, 1.2176, 1.2132 (50% of Euro's lifetime high/low or 1.6038/.8225), 1.2111, 1.20000 (psychological), 1.1826, 1.1641 and 1.1432.

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.