My long from 1.0466 profit-stopped out at 1.0491 for +25 pips. I'm glad I took some partial profits yesterday when it faltered just below the 1.0560 resistance zone.
I'm back in long at 1.0462. Why? One reason is that the pair dropped to support overnight (although rather sharply) where it then seemed to base. This support level was also about a 50% retracement of the move up from 1.0348 to yesterday's high of 1.0555. Momentum, via RSI, is still relatively OK. Finally, with an overnight low of 1.0446 I can have a tight stop.
Yet, the same barriers exist today. It has to get through the formidable 1.0560 to 1.0675 resistance zone. You can see that traders were quick to sell when the pair began faltering at resistance. So we're going to have to see what happens.
Resistance is at 1.0487, 1.0525, 1.0555, 1.0640/54, 1.0675 (tight layers make for tough resistance) and 1.1138 (yeah, well, if it does clear all that resistance then there's not a lot of resistance before that price). Support is at 1.0446, 1.0426, 1.0380 (yesterday's 3-hour doji), 1.0348/38 and 1.0228/17.
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.