The bears certainly expected Euro to begin its plunge by now, especially those who believe price is within a third wave down. The bulls would like to see it scoot up and take out 1.4442 (June 22 high) and then the 1.4697 prior high. Both sides are bound to be somewhat frustrated as it plays its small moves with no definitive action.
Those who went short in the 1.42 area are probably approaching stops. This may fuel some additional price rise. However, logical resistance is the 1.4385 confluence area, 1.4378 (weekly pivot R1 calculation) and 1.4428/50 which is key resistance.
On both a weekly and daily basis, there is a bearish bias. However, RSI lows on the daily chart are not as low as one would expect to see if the bears had true control. The daily uptrend line (since January), broken with the June 16, 1.4074 low, has been serving as a magnet line for price.
On my three-hour point and figure chart, Euro is caught in a symmetrical triangle with small columns of X and O. This only means that supply and demand are approximately equal. Underlying this, though, is the real question of whether accumulation or distribution is taking place. There needs to be a definitive move one way or the other to answer this question.
I may try a short in the 1.4340/85 area. I'll post a chart when there is a more definitive move.
© 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.