GBPJPY--short

I shorted at 144.72 this morning and have just taken partial profits at +64 pips. The main reason for shorting is that the pair started to stumble at prior resistance but in addition there is still downward sentiment on the pound. The pair has also broken below a short-term uptrend line along with RSI doing the same.

The pair has so far reached a low of 143.98 but this is support and a round number so what it does here will hint at the remainder of the day. Additional support is at 143.14, 14221/17, and 141.60. Resistance is at 144.92, 145.29 and 145.98.

Here's the one-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.

AUDUSD—broke above downtrend line

My short from .9269 stopped out at – 40 pips. One can make a case for going long because the pair broke above the downtrend line from early April. However I'm going to hold off before doing so. There have been a lot of false signals in the market and it's Friday so I'm winding down for the week.

Resistance is at .9364 and I wouldn't be surprised to see sellers here. Beyond that is 9406 and .9579. (1.21 of 9406-8578=.9579; .9121 is speed line). Support is at .9262, .9250, .9070 (100 SMA), .9039, .9002, and .8927. (.8808 is the point where two speed lines come together from Nov high and 2008 lows).

© 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.

April High/Lows

These are the high/lows to date for April. An asterisk next to a number means it is a higher high or lower low for the year to date.

AUDUSD: .9391*/.9136
EURGBP: .8897/.8064*
EURJPY: 127.94/122.37
EURUSD: 1.3692/1.3114*
GBPJPY: 145.98/139.39
GBPUSD: 1.5523/1.5126
USDCAD: 1.0215/.9930*
USDCHF: 1.0925*/1.0435
USDJPY: 94.69*/91.60
USDTRY: 1.5224/1.4683
USDZAR: 7.5295/7.1960*

EURUSD—Monthly chart

A look at the monthly chart supports the EW interpretation on the daily chart. April's low almost touched an uptrend line from 2002 and it looks as though the pair is trying to base. The pair has not moved into oversold as to RSI which would be below 30 so there's still room to do that if the bearish sentiment persists but I think an upmove is more likely before more lows.

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.

EURUSD—EW Daily Count

One can make a very credible argument that the Euro has completed the first wave of the move down from the November high of 1.4141. The daily chart shows an almost classic wave pattern. In this case, wave B ended with the low of 1.3114 on Tuesday and we're beginning the C wave up. C waves are third wave—that means they're powerful. The C wave must be an impulse or ending diagonal so expect it to break down into five waves. The potential target is 1.3818. There's some positive divergence on the daily chart which lends support that this move will continue up a bit. However as I noted the other day, there's lots of indecision and bearish sentiment on this pair. If the pair begins to break down below 1.3114 would negate this interpretation.

I've notated 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.

GBPUSD—rallying

What was left of my original short at 1.5478 profit-stopped at +168 pips. The remainder of the short from 1.5267 profit-stopped at +20 pips.

In the rally off yesterday's low of 1.5126 the pair reached a high so far today of 1.5391 from which it has since dropped back to 1.5313. Prior resistance was at 1.5335 and 1.5360 and there was a downtrend line coming in at that level so it's no surprise it would back off to regroup. However the pair has broken a steep uptrend line in doing so and has also broken the RSI uptrend line. It's possible it will return to that short uptrend line at 1.5365 and turn down again. However, it if successfully clears it then 1.5509 is a definite possibility but look for faltering around 1.5500.

Resistance is at 1.5365, 1. 5391, 1.5427, 1.5460, 1.5509/26 (strong), and 1.5708. Support is at 1.5313, 1.5222, 1.5154 (about 50% of the 1.4785 to 1.5523 gain) , 1.5126, 1.4971, 1.4798 and 1.4692.

I can't upload the chart for some reason but take a look at the hourly 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.

AUDUSD—resistance

The little rally caused my short from .9232 to profit stop (barely) at +10 pips. AUDUSD touched the downtrend line coming in from April 13 as it rallied to .9294 this morning. The former long-term uptrend line is coming in at .9300 so this should serve as resistance. I shorted again at .9269.

That said, all those layers of support are still holding at .9249, .9200, .9138 (long-term uptrend line), .9070 (100 SMA), .9039, .9002, and .8927. (.8808 is the point where two speed lines come together from Nov high and 2008 lows). Resistance is at .9313, .9364 (although I'd expect sellers here), .9406 and .9579. (1.21 of 9406-8578=.9579; .9121 is speed line).

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.

EURJPY—back to resistance

The remainder of my short from 124.59 profit stopped at +20 pips as the pair headed up again in the now familiar false signal market. This market is messy. The pair held above its trendline yesterday (currently the line is at 123.62) and has reached a high of 124.87 so far today. Again, it's hesitating here so sellers must be coming in but will they be able to push it down? If so, can it drop below the rather shabby 123.26 low of yesterday? Inquiring minds want to know. The just completed candle on the three-hour chart is a doji so there are obviously a lot of inquiring minds who are quite uncertain. The hourly chart shows some negative divergence.

The pair needs watching as to whether it can get above the doji high of 124.87. If not, another short may be in the cards. If it does so with some conviction, however, the behavior at 125.00/25 will be interesting since that's quite strong resistance. Once beyond there it could reach 126.31. Support is at 124.19 (a short-term trendline), 123.62, 123.00 and 122.00.

Here’s the one-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.

USD Index

I haven't blogged about this since mid-April when the chart was rather messy looking with four doji in a row. The chart remains somewhat messy with upper and lower shadows on the candles. As a result, even though the pair has been drifting upwards, I wouldn't start assuming its an unfettered trend to new highs yet.

On the daily chart you can trace out legs A and B of what could be an ABC correction as part of an Elliott Wave (EW) expanded flat correction. Until the last couple of days I thought perhaps we were in a zigzag correction but if that were true than leg B couldn’t exceed leg A and it has done so with yesterday's high of 82.71. (Wave A was from the 3/25 high of 82.24 down to the 4/14 low of 80.03 or 221 points). To be a flat correction, there are four rules:

1) It always subdivides into three waves (this looks potentially realistic)
2) Wave A is never a triangle (it wasn't)
3) Wave C is always an impulse or diagonal (we'll have to wait and see)
4) Wave B always traces at least 90% of wave A. (So far it has retraced 268 points compared to wave A's 221 points so it has done so. Being more than 105% of Wave A allows it to be categorized as an expanded flat).

How far could this wave B go? Up to 138% is the guideline which would bring it to 83.08. By then price should turn back down into wave C. Wave C is usually between 100 and 161.8% of A so, if yesterday's high of 82.71 holds, one could expect lows from 80.50 down to 79.13. It would be great to have such certainty but EW is hardly perfect. Still, it's an interpretation.

The uptrend lines on the chart and prior lows suggest that a touch of 80.18 to 80.50 should prove to be support. If the index starts to falter there it lends a bit more weight to the EW projection of possibly going down to 79.13.

The other thing to note on the chart are those shadows. Shadows, up or down, represent indecision. This is a nervous market—risk averse one day; willing to bet the farm the next. Eventually it will sort itself out but for now that's what the reality is. Maybe it is Mercury Retrograde as the astro bunch keep saying. As traders, though, we don't need to know why but rather what and the what is that things are tricky right now.












© 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.

EURJPY—struggling

EURJPY has been struggling because of the Euro's troubles and of course the yen tends to gain on bad news such as yesterday's downgrade of Greek debt so there's a good chance it could sink lower even though it has regained a trend line.

I shorted at 1.2459 as the pair struggled with resistance there which exists on up to 125.25. If it could break above there then 126.31 is possible. I've taken partial profits already at +65 pips although I'm thinking it could drop down to support at 124.00, 123.00, and 122.00. To do this it has to break below the trend line it is currently sitting on. Just as with other pairs, there is positive divergence on the chart.

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.

AUDUSD—struggling with resistance

AUDUSD dropped to a low of .9136 yesterday before rallying.So far, at least, the layers of support I've blogged about seem to be holding although it's a bit dicey at this moment as to whether they'll continue to do so given that the pair seems to be struggling with getting through .9249. As a result I've shorted at .9232 with plans to stop and reverse if the pair can get any legs for a rally.

Support is at .9200, .9157, .9136, .9071 (100 SMA), .9002 and .8927. It's likely that if it approaches its 100 daily SMA there will be buyers coming in. Resistance is at .9250, .9313, and .9364. Unless sentiment changes, anything over .9300 will bring out sellers. However there is positive divergence on the three-hour chart.

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.

GBPUSD—at support

I took partial profits from my short at 1.5478 at +300 pips. I also added a short yesterday at 1.5267 and have taken partial profits at +60 pips.

The pair has dropped to a low of 1.5146 so far this morning. That was the last closed candle's low and the current candle's low. If it stays above this, it's significant because 1.5154 is about 50% of the 1.4785 to 1.5523 gain. 1.5130 is also a prior identified support. There is some positive divergence on the 3-hour chart. The pair has bounced so let's see what unfolds.

Resistance is at 1.5200, 1.5288/95, 1.5335, 1.5427, 1.5460, 1.5499, 1.5509/26 (strong), and 1.5708. Support is at 1.5146, 1.4971, 1.4798 and 1.4692.

Here's the 3-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.

AUDUSD—took profit

AUDUSD has dropped sharply to a low of .9158. My short from .9306 hit its profit target at .9170 for +136 pips.Had I been at my computer I might have moved the take profit target but I was at lunch. However, there are layers of support in here and I'm long now with a small position at .9181. I can set a very tight stop here which is a nice trade. As I wrote this morning, .9202 is the prior downtrend line from November; .9200 is a round number; .9189 is an uptrend line from February; and .9176 is a shorter-term uptrend line.

Should it start to break down, however, I will wait to see what it does as it approaches .9118 (the daily 55 SMA) and, more importantly, .9068, the daily 100 SMA. Those prices are bound to bring out buyers.

© 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.

GBPUSD—Nice drop

All my reasons for shorting yesterday at 1.5478 were confirmed with the drop down to a low of 1.5322 so far this morning. I have taken partial profits at +135 pips.

The pair has already achieved the price target from the triangle on the 30-minute chart that I shorted against yesterday. It will find good support at 1.5289/95 if it continues down to there. It broke its uptrend line from March at 1.5335 and as of now it's forming a small pennant on the 30-minute chart. This would normally hint at continuation so let's see.

Should it get down to the bottom of the triangle I may reverse but it will depend on really short-term price action and momentum.

Resistance is at 1.5335, 1.5427, 1.5460, 1.5499, 1.5509/26 (strong), and 1.5708. Support is at 1.5296, 1.5192, 1.5130, 1.4971 and 1.4798.

Here's the 30-minute 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.

AUDUSD—resistance held

As I wrote yesterday, the resistance at.9316 was an important one and AUDUSD topped out at .9313 before turning down again. I shorted at .9306 and just took partial profits at +70 pips.

Ever since AUDUSD broke above its downtrend line from Nov. '09 (with touches on Jan. 14 and Mar. 17), it has been trading in a fairly narrow, downward sloping range of .9158 to .9364. The pair has to break above that if it's going to resume its climb upward. A clear break above there would be good for the bullish view and the pair could reasonably target .9406 to and .9579

As of now, both .9313 and.9364 will probably bring out more sellers, especially those who went long yesterday morning and are now just hoping that the pair returns so they can gracefully exit.

However, lest those who are short get overly excited, it's worth remembering that there are layers of support approaching. .9202 is the prior downtrend line from November; .9200 is a round number; .9189 is an uptrend line from February; and .9176 is a shorter-term uptrend line. If it breaks below all of this then .9118 is the daily 55 SMA and .9068 is the daily 100 SMA. These levels are bound to bring out buyers.

RSI is coiling so watching momentum is important.

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.

USDCHF—fakeout

My long from 1.0636 profit stopped out overnight at 1.0702 for +66 pips. In one of those market moves you have to love it went only two pips lower before heading up again. Oh well.

The break below the downtrend line at 1.0732 was obviously a fake out. I missed the chance to buy again as it broke back above that line so the thing to do now is to wait to see how it behaves if it approaches 1.0851 again. Signs of weakness there would be reason to short; signs of strength and a push above would make it a good place to go long.

The 1.0684/1.0722 area is a key area for this pair. The fact it bounced off 1.0700 could be good news and mean there's more strength than some believe. It has already overcome yesterday's high so let's see where it goes.

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.

EURGBP—good bounce off support

Friday I shorted at .8675. That trade stopped out at breakeven. However, the pair found support in the low .86 region over the last few days. Its prior low in January was .8603; its low yesterday was .8604. I bought it at .8622 yesterday morning and just took partial profits at +50 pips.

EURGBP is currently offered at .8673 and it's confronting significant resistance. As I wrote last week, .8700 was a tough resistance price for the pair for much of the summer of 2009. In Jan. of this year, the pair dipped to .8603 and then hovered at support of .8660 or so for much of that period. It's also back at the lower boundary of the coiling formation it fell from last week. If I wasn't in a profitable long I'd short here because of the opportunity for a tight stop and because of Euro weakness.

On the other hand, a hammer formed on yesterday's daily candle so the low should serve as support. The two prior daily candles had lows of .8616 and .8608 so it looks as though it has tried to hammer out a bottom. Certainly if it goes below that price of .8603, lower targets will be achievable such as .8500, .8456 and .8400. Resistance is at .8698, .8719, .8839, .8865, .9026 and .9130/50.

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.

USDCHF—weekly

I'm still long from 1.0636. The long I added on Friday at 1.0774 stopped at breakeven in the pair's dip. (The trades don't show on the weekly charts I post such as the one below because I use a different charting package for long-term charting).

It's near an uptrend line at 1.0728 so there could be a move a bit lower. The 1.0728 is just below the .618 retracement of the move from 1.0674 to 1.0851. If that uptrend line holds then all is good for a push against the 1.0851 high it made last week. If it gets to 1.0851 again and begins to falter then I may reverse. There's lots of back and forth in these markets the last several weeks. Of course once we adjust to that and begin to expect it, things will change. Be ready. The 1.0684/1.0722 area is a key one.

On the weekly chart you see price action narrowing as you do on most pairs. Until it breaks out of this range of 1.0435 to 1.0900 there's not a lot to say about it except that momentum is generally bullish. One can get off some nice trades within this range if that's where it continues to stay.

Here's the weekly 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.

GBPUSD—coiling

There is quite a bit of downward pressure on this pair but, as with many of the pairs, there is also indecision about which way to go. The safest selling point in my mind is 1.5509/26 if it can get up there; the best buying price zone is 1.5289/95.

That said, I went short this morning at 1.5478 which is shy of 1.5526 by 48 pips. That didn't leave a lot of room for a tight stop so you might ask why I did so.The reasons are 1) the downside pressure, 2) on the 30-minute chart the pair was coiling inside a triangle and I thought I could pop out 30 or 40 pips from the trade before it went into a do-nothing, Monday mode, and 3) it looked like it was going into an ABC correction with legs A and B complete so C would have been down. In addition, there is negative divergence with RSI on the 30-minute chart. All good reasons, right? Haha. While my stop is already at breakeven it looks as though the pair is going into do-nothing Monday mode. Well, at least I can't lose money. Should it get down to the bottom of the triangle I may reverse but it will depend on really short-term price action and momentum.

Resistance is at 1.5509, 1.5526, and 1.5708. Support is at 1.5441, 1.5427/17, 1.5374, 1.5296, 1.5130, 1.4971 and 1.4798.

Here's the 30-minute 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.

EURUSD—weekly chart

My short from 1.3392 stopped just better than breakeven on Friday and I didn't bother getting back in since the weekend was coming on.

The pair has dropped to a low of 1.3292 this morning and seems to be rallying a bit now. If you look at the weekly chart you can see a 5 wave count down from the November high of 1.5144 which may have completed a wave one at the low last week. If this is true (and I must say that EW counts have been difficult lately), it's possible that the pair is in wave A of a corrective move up. It's possible it could reach as high as 1.3853. Let's see what happens today. If it makes a new low then that's very bearish. The other thing to note on the weekly chart are the upper and lower shadows on the candles. They show the indecision surrounding the pair.

Support is at 1.3292, 1.3202, 1.3128 and 1.30 (big psychological level). Below that is 1.2965 and 1.2863. Resistance is at 1.3400, 1.3447, 1.3525, 1.3585/91 and 1.3692.

Here's the weekly 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.

AUDUSD—close to resistance

Ever since AUDUSD broke above its downtrend line from Nov. '09 (with touches on Jan. 14 and Mar. 17), it has been trading in a fairly narrow, downward sloping range of .9158 to .9364. It's approaching the downtrend line of that range this morning, .9316. It's currently offered at .9308 (8:07AM EST). A clean break above that would be meaningful and could be encourraging for a long position but there is still nearby resistance at .9364 and my suspicion is that selling will enter as it approaches that level. A clear break above there would be good for the bullish view and the pair could reasonably target .9406 to .9579.

Looking at a short, the risk is that .9364 but support is at .9220 and then a cluster of support at .9176 (short-term uptrend line from 4/19), .9121 (daily uptrend line from Mar. 2009), .9118 (55 SMA on the daily), and .9067 (100 SMA which has served as prior support). Paying atttention to momentum is important as you consider any trade with this pair.

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.