Thursday, October 21, 2010

EURUSD—Probing upwards

Euro has moved above the channel I showed yesterday so the chances are good that it will make another try at the prior 1.4159 top, especially with yesterday's bullish candle. At this point the best thing to do if one is leaning short, as I am, is to watch for signs of another topside failure and short at that point. If you're leaning long then you'll want to enter on a pullback, possibly to the channel line at 1.3948. How will you know it's a pullback and not a new decline? Momentum on the shorter term charts will help. A move below 1.3587 or 1.3500 would be signs it was in a new leg down.

Note that on the hourly chart below there is negative divergence which makes me suspicious of this move up, even if it marginally gets above the 1.4159 level.

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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