Wednesday, October 13, 2010


Cable seems to be correcting. With a low today of 1.5755, it's perilously close to last week's low of 1.5749. However that doesn't concern me as much as a break of 1.5730 (below the short-term uptrend line). Next support after that is 1.5670, the Sept. 30th low and then 1.5627. I'd expect that to hold as it's on a former speed line and an uptrend line. A close below that would signal additional lows. Until that point I'm still somewhat biased long for this pair for all the reasons I've been blogging about. I think this may be an EW C wave and if it is .618 of A then the target is 1.6391. The January high was 1.6461 which was near my daily bull flag target. I have point and figure chart targets even higher around the 1.66 area. The pair will run into strong price resistance at from early this year of 1.6244/98.

Cable has negative divergence on the three-hour chart below. I'll probably look for longs as it approaches the small channel long depending on RSI behavior on the shorter term charts.

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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