Aussie broke above the triangle yesterday to a high of 1.0665. This was just above former short-term price resistance and price is now drifting downward and has almost reached the extended line of the triangle from yesterday's hourly chart.

This may serve as support (at/above 1.0559) or it could have been a fake-out move. If price bounces from there, it's a failed pattern (at least from the Elliott perspective) and could be the basis for some good gains. However, one will want to watch momentum if trading on this short time-frame.

One can look at this entire mess from the price high of 1.1012 as a complex correction, a double from an Elliott perspective.

Support is still present in the 1.05 area. A retracement of .382 of the move from .9706 to 1.1012 is 1.0513 and that same price is the monthly S1 pivot calculation. The weekly 10 EMA is 1.0533. There is also the psychological 1.05 round number.

Beneath 1.05 is also good support down to 1.04. The retracement of .382 of the move from .9537 to 1.1012 is 1.0439. The C leg equals the A leg of the ABC correction at 1.0414. The weekly S1 pivot calculation is 1.0444. The price objective from the triangle itself is 1.0443. After 1.04 is 1.0359, (50% of .9706/1.1012).

Resistance is 1.0665, then 1.0717.

Here is the one-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.

## Wednesday, May 18, 2011

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