Overnight the Euro dropped to a low of 1.2871 which is about where I bought the other day. However I wasn't awake and so couldn't enter the trade. I have gone long at 1.2958 which is a little high for my taste. But there was a nice strong weekly close and the Euro has had five weeks of higher highs although it has been only two weeks of higher lows as well. However, the potential is still there technically for the pair to reach the 1.31 area. 1.3108 is 1.618 the length of the A wave; 1.3150 was the price target of the bull flag from the three-hour chart last week; 1.3094 was the spike high from May 10th. Then there's that inverted head and shoulders target hanging around at 1.3454. Juicy but still unlikely unless it clears the 1.31 area.
I've set my stop pretty tight on this one since it's possible it could drop to 1.2868, the bottom of its small channel. additional support is at 1.2768, 1.2683/60 (a price I'd like for going long) and 1.2523, a price at which the Euro bulls would probably give up.
Here's the three-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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