Yesterday was an inside day which means the price action was within the prior day's range. Inside days can signal that momentum is declining or that a congestion area is forming. However without a strong trend it's not that meaningful as in this pair. There's been a general lack of direction in USDCHF—the range over the last five days has been 1.0400 to 1.0550. Eventually, hopefully before we all die of old age, it will find a direction.
The three-hour chart is unremarkable except the recent high at 1.0543 is a couple of pips lower than the prior high yesterday. It looks like another directionless summer day. I may buy at 1.0471 which is the short-term uptrend line but not if there doesn't appear to be some energy. If it drops to 1.0400, that must hold since that was tested twice last week. If it breaks, additional support is at 1.0350, 1.0283, 1.0138 and .9976.
Resistance is at 1.0560, 1.0631 and 1.0676. It will need to get beyond those close together layers of resistance to prove there's energy for a larger move.
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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