Tuesday, February 1, 2011

EURUSD—bull flag target met

Euro met its bull flag target with its high this morning of 138.04. This is just above last week's high of 137.59 and it broke minor resistance of 1.3786 as well as meeting some interim price targets. Next up is 138.60 but the pair needs to settle above 137.60 today to begin its run to 1.4000. Above 1.4000 would cause the bears to gnashing their teeth and the true blue Elliott Wave people to quietly put away their bearish charts until they can find the next Elliott argument for a reversal point. So, to sum up, resistance is at 1.3860, 1.4060 and 1.4282.

On the negative side…well, over 1.38 is a major milestone so one would expect some backing and filling. Support is at 1.3572, 1.3499, 1.3396 and 1.3254. Below that is uh-oh land. However the three-hour chart looks good momentum wise, risk aversion seems to be down, and there are a lot of serious hands in Eurozone propping up the currency. This should help. At least until the next shoe drops. And it will.

Here's the three-hour chart:

© Dianne Fecteau, 2011. 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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