My buy order was executed at 1.0396 and I currently have my stop set 10 pips above breakeven. The pair reached a high of 1.0476 where it encountered resistance and has since fallen back to a low so far this morning of 1.0433. The bounce off support doesn’t seem particularly robust particularly after the pair had dropped to a low of 1.0362. This was below the prior two touches at support of 1.04. On the weekly chart this will be the 9th week of lower lows (it’s already exceeded last week’s low). Generally, one doesn’t see more than five to seven weeks without some sort of higher low, even if it’s a very anemic one. During the long downtrend period in 2009 you saw some candles with higher lows. A look at the weekly chart shows that while the beginning candles of this latest downtrend were robust, they’ve become less so and with more upper and lower shadows. That’s a hint things may be about to turn up but it can go on like this for a while before it does.
As I wrote last week, until the pair overcomes the tough resistance from 1.0560 to 1.0675, further rises seem improbable. This may have to be sideways trade for the time being as it has been since earlier in July. On the three-hour chart this move looks corrective during a downtrend which hints more lows may be coming. As my longer term analyis has shown, however, the pair is still in an overall uptrend and will remain so above 1.0048.
Support is at 1.0420, 1.0400/395, 1.0362, and 1.0228/17. Resistance is at 1.0446, 1.0550/60, 1.0603, 1.0640, and 1.0676.
Here’s the weekly chart. My trade doesn’t show on this chart as I use a different charting package for weekly and monthly charts.
© 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.