Thursday, November 4, 2010

EURJPY—nice rally

The pair has continued up, breaking through its 113.79 resistance and has reached a high so far today of 115.42. I'm still long from 112.00 and took another third off the table this morning at +303 pips.

On the daily chart below, I've drawn a corrective channel. Making it to the top of that channel would be nice which would bring it just above 119 to the C of an ABC correction. There I'd expect sellers to pile in. In the meantime, it has to get through current resistance up to 115.69. Additional resistance is at 116.67 (fib confluence). The yen has been strong recently and sellers are remembering that so it may take a bit to get through the current resistance.

On the daily flag I've also traced out a bullish flagpole with a broken dotted blue line and projected it upwards from the breakout point. At this point, I don't really see it getting there but maybe. In any case it would definitely have to clear 119.20 before it did so.

I'm in and happy but would I add to my position? A retest of 114 support would be lovely and would certainly bring in buyers, myself included. 112.83 is the next support after that.

Here's the daily 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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