After yesterday's post on this pair, I did go long at 129.35. I just took partial profits at +102 pips.
I wrote yesterday that corrections often stay within parallel lines. I still believe the pair could get back to the top of this upward correction (131.30). However at this point, it's at the mid-point of the correction with a high of 130.54. This is resistance since 50% retracement of the most recent down is 130.73 and this is also a prior high. If it falters here, look hard at the action around the upward line of the correction at 130.33. There the line joins with the downward trend line so it strengthens it as support. There could be a retest and then a resumption of the rally. If so, expect to see 131.40, 133.03 (fib confluence), and then higher. RSI is still coiling and should break above the coil if the pair is serious about a move up.
Breaking below 130.33, however, opens up 128 again and below that look for a retest of 126.44. I have price targets below that from my Point and Figure charts of 121.50, then 120.40, 119.70, and .9990.
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.