Tuesday, November 30, 2010

EURUSD—still weak

The low so far this morning is 1.2980 which is more than 50% retracement of the move up from the June low. A .618 of this would be 1.2795. Because that's near a round number of 1.28, is an internal 45° degree support line on my point and figure chart, and a price target from other calculations, it seems probable it can make it. I have targets that go much deeper but there's not a lot of sense in talking about them at this point since no pair follows a straight line down (or up). That said, I have to say that one of the more meaningless statements I read by an analyst this morning was that the Euro had traded at this level many times before. Clearly a perma-bull who thinks this weakness is just temporary. But it's worth noting that the Euro is very oversold and, as I wrote yesterday, there's a cluster of support around the 1.30 price. A rally isn't out of the question. 1.3150 is the most likely resistance and I'd probably add to my short there. I did take partial profits at +580 pips. Only above
1.3317 would I expect to see a potential move back to the 1.35 area. I don't think that's likely.

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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