Thursday, June 3, 2010

USDCAD—at support

The pair continued to drop from yesterday's high of 1.0573 right past the pattern price target of 1.0423 to a low, so far this morning, of 1.0334. Here it begins running into key support, ranging from 1.0275 to 1.0327. 1.0275 is an up trendline from the April lows; it's also near the 1.0283 which is .618 retracement of the move from .9920 to 1.0855. 1.0325 hits a speed line as well as prior support. Additional support is at 1.0150, 1.0100 and 1.0045.

I bought at 1.0355 which was a bit aggressive. However, I can have a really tight stop and there is positive divergence on the hourly chart. Momemtum is going to be important on an hourly basis as it will offer clues to the general sense of risk aversion.

Resistance is nearby at 1.0395 (fib confluence). After that it's at 1.0429, 1.0573/81 (strong), 1.0610, 1.0719 and 1.0855.

Here's the hourly 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.

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