Yesterday's low was 1.2874. In reaching this low, one can make an argument for a five-wave decline. If this isi true then prices would move up. A rally would make sense given the positive divergence on the daily chart. A logical target would be 1.3040 to 1.3088. There's fib confluence here (.382 of the move from 1.3824 to 1.2874 and .50 of the move from 1.1876 to 1.4283) and it's near a broken Point & Figure 45° line. Additional resistance is found at 1.3125/54 (this is the small triangle Euro broke below so a retest would make sense), 1.3225 and 1.3300. I would re-establish short positions at any of those if my profit stop is hit on my existing short position.
Support is at 1.2806/2795, 1.2655, and 1.2588.
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.
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