Thursday, August 26, 2010

EURUSD—ranging within broadening pattern

Euro is moving within a broadening pattern on the hourly chart. The rally from yesterday's 1.2588 low has been sluggish which doesn't bode well for things. A broadening pattern after any kind of uptrend can be deadly. The high today, so far, has been 1.2746 well within expected correction levels. Only if the pair breaks above 1.2775 can one expect more upward price probes. Note that this is about the top of the broadening pattern as well as the .382 retracement level (1.1892 to 1.3335) so a failure at that price should encourage a short position. Still weighing on the pair are the daily simple moving averages. It's struggling with the 10 right now at 1.2747; the 50 is right above it at 1.2756.

Support is at 1.2726, 1.2613, 1.2588. Should it break upward of 1.2775, one can expect resistance at 1.2800 and 1.2927.

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.

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