I'm still long from 1.2236 and 1.2247.
The pair closed yesterday at 1.2318 which was above the 20 day SMA that has been holding it down since April. That average is now at 1.2223. It has barely taken out yesterday's high of 1.2349, touching 1.2353 overnight. I wrote yesterday that since early Monday the Euro appeared to be basing in the 1.2164 area. For the last few three-hour bars it appears to be trying to base at .2262/74.
The fact is that at the moment the pair has been in a narrow 91 pip range for the last 22 hours. It will break out of this range eventually. The clues are for an upward breakout (the higher levels of basing, the higher highs and higher lows of the past few days, the fact that it's back at an Elliott Wave 4th wave triangle which can cause resistance) but its sluggishness is less than inspiring.
If the pair can break upward, 1.2575/83 is a target. As long as the Euro stays above 1.2150/65, this is a good possibility. So, if you're not already long, you could wait to buy on a pullback. The 20 day SMA at 1.2223 would be good or somewhat above, up to 1.2250. Otherwise, you could wait for a breakout from this resistance area. Shorts will make sense if momentum breaks down completely but I'll blog if that happens because I'll probably reverse.
Resistance is at 1.2353, 1.245, 1.2575 and 1.2673. Support is at 1.2299, 1.2223, 1.2164/50, 1.2117, 1.2045/25, and then prior lows.
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.