Wednesday, September 29, 2010

EURGBP—nice rally

EURGBP has continued to move up nicely, finding a high of .8618 so far today. This is well above the key resistance at .8531.

I'm still long from .8497 and I added another long position at .8597.

My initial price target is .8732/46 which is fib confluence as well as the target for a pennant that formed on the daily chart. If the pair clearly closes above that then it's possible the psychological .9000 is next. Corrections should find support at .8532, .8467, .8400 and .8383/74. Below that would signal the end of this rally and the larger downtrend would resume.

It's worth noting that on the three-hour chart below there is negative divergence between RSI and price. Not unusual these days but the pair may need to resolve it before going higher.

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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