After reaching 1.4248 yesterday morning, Euro corrected sharply. I wrote yesterday that the potential for the wave C was 1.4179 and 1.4141. Obviously, it slid through the 79 and its low so far this morning is 1.4143. This is also price support down to 1.4138 so let's see if it can rally.
I wrote yesterday that the correction low of 1.4179/41 might be a good entry point for a long position. How do I decide if it is? One tool is RSI. For example, on the hourly chart, there is slight positive divergence beginning and this could be the sign that the correction is ending. Another hint from RSI would be RSI staying above 44 on the three-hour chart. These are both things that I've illustrated in the past. Price bouncing from here would be a clue, of course. Look for a bullish candle on the shorter-term charts, first. If it fails to bounce, look for support at 1.4100, 1.4041 and 1.4000.
Should it rally, immediate resistance is at 1.4154 and 1.4215. After that it has to take on 1.4248/83 again. Beyond that is 1.4345, 1.4400 and 1.4447.
No charts this morning—I'm having some time crunch problems.
© 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.