EURUSD touched a low of 1.2874 early this morning. The drop began last Tuesday and on its way down it has broken both the weekly and monthly 10- and 20-EMAs, the 200 daily SMA, psychological support at 1.30 and of course, the price support of 1.2969. It also broke and closed below a symmetrical triangle on the daily chart.
Support is at 1.2806/2795, 1.2655, and 1.2588. The best guess is that Euro will flirt with the 1.20 area in the first quarter of 2011. However, no matter how grim things are for the Euro, this won't happen in a straight line and there will be rallies. I expect any resistance to be capped at 1.3100/28 and plan to add to my short position during rallies.
I'm still short from 1.3222 and took partial profits at +301 pips.
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.