Wednesday, December 1, 2010

EURGBP—November evening star

The monthly chart shows an evening star pattern which formed near price resistance—the downtrend line from 2008. However the pair is in a triangle with the downward sloping line at .8878 and the upward sloping line at .8204. So a rise to .8878 is possible although the downtrend is bearish overall. There's also a corrective downward channel on the chart. The bottom line of this is at .7856.

Yesterday's low of .8335 was just below the price target of .8363 from the head and shoulders pattern on the daily chart (see Nov. 10th blog). The pair immediately began a rally which has reached .8417. As I wrote yesterday, this is tough resistance up to .8500 and I doubt the pair will overcome it. So I'm using rallies as short opportunities.

Support is at.8350/35, .8204, .8068 and .7856.

Here's the monthly 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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