Best wishes for a wonderful holiday season. The blog will return Dec. 28th.
Wednesday, December 22, 2010
Tuesday, December 21, 2010
EURUSD—weak
With last Friday's close, Euro logged three consecutive weeks with a close below the 10- and 20-EMA on the weekly chart, currently at 1.3383 and 1.3365 respectively. Last week's candle was bearish with its long upper shadow. If you're not already short from last week (Friday high was 1.3360), this probably isn't the time to jump in but shorting on rallies seems the way to go. Support is at 1.3097/94 (200 daily SMA and Monday's low), 1.30 (psychological) and then the Nov. 30 low of 1.2969. Resistance is 1.3360/65 and 1.3398. Only if the pair closes above 1.34 would the near term outlook improve. On the weekly chart, you can see the pair is near the bottom of a channel—it could be starting down after the ABC correction but one can't rule out the possibility of one last upward push. RSI has broken below its upward trend line; once price does, then one should see further lows. The pair is in an overall downtrend. I don't think much of anything will happen for the rest of the year but keep stops tight regardless of direction.
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.
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.
EURGBP—not giving up yet
This pair is interesting simply because despite the Euro's woes, it doesn't seem to want to collapse against the British pound. I've been long but bailed out yesterday at +77 pips because of it nearing the .382 retracement of the move from .8941 to .8335 and because of the holidays.
On the weekly chart, there was an outside candle last week with a range from .8345 to .8556 (8566 is the .382 retracement). The low in November was .8340; in December, to date, it has been .8334. The pair is trying to base and trying to overcome that initial resistance of .8566. Beyond that is resistance at .8595 and .8638 (the 50% retracement of 8941 to 8335 and just above the 50% retracement of 9150 to 8068). The 10- and 20-EMA on the weekly chart are within pips of each other at .8515/19 and the monthly 10- and 20-EMA are identical at .8532. Clearly, this current price zone is significant resistance. Failure is probable but what will be more intriguing is if it doesn't fail. That would signal potential gains to .8759 and .8941. However I'd expect middling trading until after the start of the new year.
© 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.
On the weekly chart, there was an outside candle last week with a range from .8345 to .8556 (8566 is the .382 retracement). The low in November was .8340; in December, to date, it has been .8334. The pair is trying to base and trying to overcome that initial resistance of .8566. Beyond that is resistance at .8595 and .8638 (the 50% retracement of 8941 to 8335 and just above the 50% retracement of 9150 to 8068). The 10- and 20-EMA on the weekly chart are within pips of each other at .8515/19 and the monthly 10- and 20-EMA are identical at .8532. Clearly, this current price zone is significant resistance. Failure is probable but what will be more intriguing is if it doesn't fail. That would signal potential gains to .8759 and .8941. However I'd expect middling trading until after the start of the new year.
© 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—near top of range
AUDUSD opened 2010 at .8927, reached down to a low of .8067 in May, and then climbed to a high of 1.0183 in November. It then fell to .9537. The rally from there, many of which believed would result in a swing high to 1.03 or thereabouts has stalled. Some might speculate that a thin holiday market is responsible. However, note that last week's candle was bearish with its long upper shadow reaching up to 1.0029. In addition, if you look at a three-hour chart, you see that the rally from .9537 looks corrective (three waves up) and that the entire move is taking place within a rectangle. Be that as it is, the pair is still in an overall uptrend for the year.
Trading in an illiquid market can be dangerous. However, the pair looks like a possible short around current levels (9988 as of 8:19AM EST). Weakness appears if the pair is unable to climb above 1.0005 (downtrend line from the 1.0183 high) so the stop can be tight. Initial support is at .9889, .9825/12, .9767/25 and .9650. A close below .9537 (the last swing low) would open support at .9406, .9222, and .8770 (strong). Above 1.0005 is additional resistance at 1.0029 and 1.0183. Above 1.0183 opens up prior price projections but let's see if it can get above there before discussing those again.
I looked at average monthly moves in price for AUDUSD during December going back to 1980. There are some outliers (i.e. 850 pips in 2008 and 525 in 2003) but the range is generally below 400. The range so far this month has been 492 and it's nearer the top of that range than the bottom. Data like this can be useless—I certainly wouldn't bet the farm on its reliability but it gives some sense of range.
Here's a 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.
Trading in an illiquid market can be dangerous. However, the pair looks like a possible short around current levels (9988 as of 8:19AM EST). Weakness appears if the pair is unable to climb above 1.0005 (downtrend line from the 1.0183 high) so the stop can be tight. Initial support is at .9889, .9825/12, .9767/25 and .9650. A close below .9537 (the last swing low) would open support at .9406, .9222, and .8770 (strong). Above 1.0005 is additional resistance at 1.0029 and 1.0183. Above 1.0183 opens up prior price projections but let's see if it can get above there before discussing those again.
I looked at average monthly moves in price for AUDUSD during December going back to 1980. There are some outliers (i.e. 850 pips in 2008 and 525 in 2003) but the range is generally below 400. The range so far this month has been 492 and it's nearer the top of that range than the bottom. Data like this can be useless—I certainly wouldn't bet the farm on its reliability but it gives some sense of range.
Here's a 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.
Monday, December 20, 2010
No posts today
I'll be making some posts tomorrow, Tuesday, but then winding down for the rest of the holiday week.
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