Thursday, November 11, 2010


I still have one long from .9634 and my other long from .9717 stopped at breakeven as this pair meanders in a narrow range from .9677 to .9768. Meandering does not bode well for good gains in either direction as it represents uncertainty and indecision. The cheery side of this is that it won't stay this way forever or even for very long. Eventually some movement will take place.

For a bullish outlook, I'd like to see the pair close above .9842/57 and then vigorously move above that price. On the three-hour chart that would put it above the triangle top line at .9842 and above a wave C equal to .618A at .9857. Then it would be in a position to move to the top of the channel at .9992 and then to 1.0057 where wave C equaled A. Above 1.0057, of course, would hint at a return to 1.0332 where it would run into horrendous resistance (look back on the daily chart (not shown) to the July/August timeframe to see this congestion zone). Bolstering a positive view is my daily point and figure chart which has a price target of 1.0600, almost at the top of that resistance zone. However I'd expect a lot of chop in the 9972/9463 range in the near-term. Chop can eat you up so if you can't take the risk of setting a stop below .9463 then it's best to stay out of this market for now.

A bearish outlook would prefer a drop below .9590, then .9500 for a strong move towards .9463 and beyond. On a three-hour chart, one can see that RSI has dropped just below its uptrend line. If price follows by dropping below .9619, that's a hint things will drop further. One can make a credible argument for things moving below .9463 to .9000 but I'll hold off for now. The chop I wrote about above would most likely still happen for the near term so sellers need to take that into consideration.

Best choice may be to sit this one out for a bit. My long is profitable so that can stay for now.

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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