This pair should be doing slightly better than the Euro but it has its own share of problems. Nonetheless, there is positive divergence on the 3-hour chart and the doji that formed on the last closed candle with a low at 1.4346 is roughly at support. I have entered a small long at 1.4403. If the pair should sink below the doji low then a stop and reverse may be in order.
There are two key things to note about this trade. First, the position size is small. This is because the market is nervous with negative sentiment—fear—abounding. So I've reduced my normal position size to take that into account. I can always add to the position if it starts to trend upwards. Second, the doji low is significant because it's near support. Since there is an uptrend line involved as well, it's possible the break below is a fake-out. But of course it may not be. So my stop is fairly small.
Support is at 1.4395/89, 1.4346 (today's low), 1.4260 and 1.4228. Resistance is at 1.4532, 1.4563, 1.4682, and 1.4714.
© 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.