I had a small buy order execute at .8281 Friday but I had no enthusiasm for sticking with it over the weekend and closed at break even. The negative divergence on the hourly chart certainly didn't help. I sold this morning at .8304 and have already moved my stop to breakeven.
Just as the Euro may be in an ABC correction, this pair could be as well with the C wave completed. As with the Euro, it ended up between targets—C would have been.8265 if it had been .618 of A or .8326 if equal to A. What needs to happen is for the pair to start to drop, certainly below .8265 and then below .8218. I would have expected it to drop last Friday when it touched .8299 and then RSI fell below 70 on the hourly chart but it didn't. This is suspicious behavior which is why I keep moving stops to breakeven so quickly. However evidence is in favor of shorting as I wrote last week and short I am.
Resistance is at.8326, .8380 and .8400. Support is at .8265, .8218, .8180, .8107/00, .8068, .8000 and .7900.
Here's the one-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.
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