EURUSD—ranging

The pair has been ranging the last couple of days. I have two longs from 1.2400 and 1.2413. I just took some partial profits at +190 pips.

The high on Friday was 1.2611; the high so far this morning as of 5:14 AM EST was 1.2607. In between the pair dropped to 1.2480, narrowly missing my profit-stop and where, had I been trading, I would have probably added to my position. However, I may get another chance. The pair is just above a Fib confluence zone of 1.2589 and just under a daily speed line. This helps to understand its current struggle to push higher. With a recently completed doji on the hourly chart, much will depend on the behavior of the current candle as far as setting a near-term direction goes.

Assuming this is an Elliott Wave C, price targets were (or are) 1.2517 (.618 the length of A's 591 pips from 1.1876 to 1.2467) or 1.2743 (the length of A). 1.3108 is also possible if C extends to 1.618 that of A.

Price obviously made it above 1.2517. One would expect more of a drop than the intervening 1.2480 so we'll have to see. The current behavior could be a bull flag; if it is then the price target is 1.2944 (1.2611-1.2194=412 added to the breakout price of 1.2532). The May 3 low of 1.2937 lends some evidence for this as a reasonable target. If Euro can get above Friday's high with good momentum, I may add to my positions.

Resistance is at 1.2611, 1.2673, and 1.2743. Support is at 1.2480, 1.2435, 1.2409, and 1.2350. This shows layers of support so if it breaks below those then expect lower.

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.