Euro reached a low of 1.3120 overnight. The pair managed to spike up to 1.3236 this morning after what appeared to be an evening star on the one-hour chart (not shown). The current candle on the three-hour chart may complete an evening star (but one has to wait until the candle completes). A Reuter's poll showed that there's consensus opinion Euro will drop to 1.2000 in 12 months. So why isn't it dropping more than it is? I'm not sure it's quite ready to give up the ghost and I won't be until it moves and stays definitively below 1.3150/25. It's troubling that the drop so far has been only to the .382 retracement of the move down from the November high. An argument could be made it's retesting support.
There is, however, slight negative divergence on the three-hour chart. It could also fail a test of support. The fact remains though that if wave C is over then there is going to have to be a five-wave decline from 1.3262. This is another pair where I may be willing to reverse.
Resistance is 1.3262, 1.3300, 1.3355 and 1.3433 and 1.3525 (50% retracement of wave one down from November highs).
Support is 1.3125 (.382 retracement of move down from Nov high), 1.3000, 1.2981/50, and 1.2877.
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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