AUDUSD—another drifter

I bought yesterday at .8791 based on the three-hour chart. The pair rose after a hammer candle shadow touched support at .8714 and made a strong up candle. I'm now profit-stopped (just barely). However I don't have a lot of hope for this trade. All the pairs seem to be in the summer doldrums today. Or waiting for Bernanke's testimony, ha-ha.

The pair can only drift for so long. Eventually it will either resume its uptrend toward the confirmed double bottom price objective of .9040 and potential Gartley pattern I wrote about yesterday or it will head down in accordance with wave and broken trend line interpretation. Let's hope it doesn't leave too many traders lurching with losses in the meantime.

There's divergence on the hourly chart. There are probably buy orders at .8800 so a sustained drop below there won't be good news for bulls. After that, support is at .8714, .8668 and .8633. Resistance is obviously the big bugaboo at .8860/80.

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.