Monday, November 8, 2010

AUDUSD—retest of channel line

On the daily chart AUDUSD has returned to the channel line it broke above last Thursday, currently 1.0079. So one could try a buy here or somewhat below at 1.0041 (Thursday's low). Risk reward is good with a tight stop (just below 1.0003, the prior swing high) and potential up to 1.0333 (7/82 high and 1.0435 (4/82 low). The pair could be just working out the negative divergence on the daily chart with a correction. However, consistent closes on an hourly basis lower within the channel, especially below 1.0003, would signal a deeper correction is in store. I'd be ready to short at that point.

© 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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