There are some conflicting signals on the hourly and three-hour charts. Were I not long I wouldn't be trading this pair this morning because of this. However, looking at the daily chart, one could make the case for a double or triple Elliott Wave correction. There's also a triangle shaping up. The trend line of the triangle would cap price at .8775. I blogged yesterday that the weekly chart showed the 21 EMA at .8773. That would be a price, then, at which point it would make sense to try a short. If it breaks above there then the weekly rectangle would come into play at .8860. This price is the June 21 high and polarity. It's also supported by EW interpretations on the hourly chart which targets price at .8835 and fib retracements. (.8868 is .618 of the .9364 to .8067 move). The confirmed double bottom in this pair never achieved its price objective so just over .90 is also possible. However that's looking less likely. Should the pair begin to drop, .8510, .8316, .8133 and .8067 are support levels.
The bottom line seems to be that waiting for a short at either .8775 or .8860 is the thing to do.
Here's the daily 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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