With the destructive earthquake and tsunami off Japan, the market is in a risk averse mood and prices are dropping in many pairs. In a recap of the week so far as of 9:20AM EST:
AUDUSD has had a challenging week, dropping from a high of 1.0202 last week to a low of .9969 today. This is strong support—it includes the monthly pivot, the 100 daily SMA and confluence. Currently the pair is trying to base. If it can't then Aussie may be heading towards a weekly close lower than parity, something that hasn't occurred since the end of January. There has been no daily close below parity since February 15.
EURGBP has struggled with resistance this week with a high through yesterday of .8608, only one pip higher than last week. Lows have been mostly lower this week but Thursday's candle had a long lower shadow, indicating that the pair is rejecting lower prices. The low of the shadow was .8534. The pair has bounced back up to .8600. This should confirm the support zone in the .8500 range. There's a potential inverted head and shoulders pattern that requires a break.8672 for confirmation.
EURJPY hasn't followed through on last week's spike high to 116.01. Throughout the week, the pair lingered in a narrow range of 114.21 to 115.26. This morning, though, it's suffering from the risk aversion downdraft, dropping to a low of 112.93 so far today. This is bearish. It's having a tough time rallying. However, there is strong support in the 111.50/112.79 zone, provided by daily moving averages, monthly pivot, prior lows and .618 retracement of the 110.67/116.01 move. If this support zone fails, additional support is at 110.77 and 109.58. The bottom of the bear flag on the weekly chart is near 107.50.
EURUSD disappointed the Euro bulls this week, dropping from last week's high of 1.4007 to a low so far today of 1.3752. On the way, it destroyed key support at 1.3880/3800. Next is a support zone between 1.3732 (50% retracement and last week's low) and 1.3685 (fib confluence). Yes, risk aversion. However, as I wrote several times this week, the move from 1.3429, while strong, looked corrective rather than impulsive. In addition, the 1.4036 high looks as though it completed an ABC correction from 1.2874 on the daily chart. It satisfies a fib relationship as well. If the downtrend continues, it's in line with the longer-term weekly and monthly charts.
GBPJPY dropped to a low of 131.18 this morning, puncturing the 200-day moving average. It's possible that the Guppy will complete its .618 retracement and retest its prior low at 129.50/25. If it failed there, then expect 125.51. However, I'd expect a rally at some point. The pair recently broke above a long-term trend line and closed above the 200-day moving average. These are bullish signs.
GBPUSD has been hammered this week with lower highs each day this week. This morning things became worse—it pierced a prior low of 1.6032 and traveled on to 1.5977. Key support is at 1.5963. That's a .382 retracement of the entire move from 1.5345, the Feb. 11 low, and confluence. Below 1.5752, the outlook would be very bearish.
USDCAD has managed to stabilize a bit, staying above last week's low of .9684. Until yesterday, the high was .9767, still below last week's high of .9790. This morning it touched .9804. The 2008 low was .9711. This is a key support level and if the bulls can't defend it, the price target from the weekly triangle of .9549 is still possible.
USDCHF stayed above its dismal .9202 low from last week as well but isn't exactly robust. The high so far this week has only been .9369. Price needs to get above .9506.
USDJPY has been lackluster this week. The high has been 83.30. The low today has been 82.01. Bottom line is it's still within its range of 80.94 to 83.97. I'll continue to trade that range for now.
© 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.
Friday, March 11, 2011
Thursday, March 10, 2011
USDCHF—dollar slightly stronger
Yesterday's low of.9269 held for a slight rally in the pair up to .9363 so far today. This was near the prior high of .9369 so of course it's stumbling. While the dollar is stronger, the headwinds are formidable.
I did go long again at .9302 with my stop at breakeven. As I wrote yesterday, while the potential loss was 100 pips and that only a high of .9506 offered a decent 2:1 risk reward ratio, my plan was to move my stop to breakeven stop with a move of 30 pips.
Resistance is at .9363, .9506, .9586 and .9650. Support is at .9300, .9269, .9224 and .9202.
© 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.
I did go long again at .9302 with my stop at breakeven. As I wrote yesterday, while the potential loss was 100 pips and that only a high of .9506 offered a decent 2:1 risk reward ratio, my plan was to move my stop to breakeven stop with a move of 30 pips.
Resistance is at .9363, .9506, .9586 and .9650. Support is at .9300, .9269, .9224 and .9202.
© 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.
AUDUSD—near support
Aussie is not immune to the negative mood, touching a low of .9992 so far today. However, it's on a daily speed line and approaching additional good support at .9988/68, consisting of a monthly pivot support, the 100 daily SMA, and confluence. A sustained move below this would be bearish with the next strong support at .9804.
However, as you can see on the daily chart below, the pair has been consolidating within a triangle. The more likely move is upwards. One can make an argument for a double/triple top or head and shoulders but neither of these exists until the confirmation occurs at .9804 for the double top and H&S and .9538 for a triple top.
Resistance is at 1.0197 and 1.0257. The pair needs to close above parity today. If it doesn't it will break a 17-day streak of having done so.
Here's the daily 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.
However, as you can see on the daily chart below, the pair has been consolidating within a triangle. The more likely move is upwards. One can make an argument for a double/triple top or head and shoulders but neither of these exists until the confirmation occurs at .9804 for the double top and H&S and .9538 for a triple top.
Resistance is at 1.0197 and 1.0257. The pair needs to close above parity today. If it doesn't it will break a 17-day streak of having done so.
Here's the daily 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.
GBPUSD—weak
Cable managed to reach 1.6243 yesterday but has fallen again to a low of 1.6039 this morning in the general weakness that has prevailed over some of the currency pairs. My long from 1.6162 stopped out at breakeven.
The low today is uncomfortably close to the prior low of 1.6032. It's not that far away from key support at 1.5963. This is .382 retracement of the entire move from 1.5345, the Feb. 11 low, and confluence. 1.6028 is the rectangle's lower boundary (outlined in gray on the three-hour chart below) so it lends support.
If the pair can't halt its slide here, the next support is 1.5995 (daily 50 SMA and confluence), 1.5891, and 1.5751/25, the .618 retracement as well as below a long-term daily trend line. This would certainly support that the high of 1.6344 was the end of a monthly ABC correction.
If the pair can recover before slipping beneath 1.6032, then resistance is at 1.6198 and 1.6243. Beyond that, look for a rally, possibly making it to the 1.6367, the weekly resistance line or 1.6465, the price where wave C would equal A on the weekly ABC correction.
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.
The low today is uncomfortably close to the prior low of 1.6032. It's not that far away from key support at 1.5963. This is .382 retracement of the entire move from 1.5345, the Feb. 11 low, and confluence. 1.6028 is the rectangle's lower boundary (outlined in gray on the three-hour chart below) so it lends support.
If the pair can't halt its slide here, the next support is 1.5995 (daily 50 SMA and confluence), 1.5891, and 1.5751/25, the .618 retracement as well as below a long-term daily trend line. This would certainly support that the high of 1.6344 was the end of a monthly ABC correction.
If the pair can recover before slipping beneath 1.6032, then resistance is at 1.6198 and 1.6243. Beyond that, look for a rally, possibly making it to the 1.6367, the weekly resistance line or 1.6465, the price where wave C would equal A on the weekly ABC correction.
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.
EURUSD—at support
I'm still short from 1.3924.
Euro has dropped to key support, touching 1.3805 this morning and forming a hammer on the hourly chart. The .382 retracement of 1.3429 to 1.4036 is 1.3803 so this is key support. If this doesn't hold, the next support is a zone between 1.3732 (50% retracement and last week's low) and 1.3685 (fib confluence).
The reasons I'm short, as I wrote yesterday, are that the move up from 1.3429, even though strong, didn't look impulsive. As a result, if it's not impulsive, but moving within a rectangle, it is corrective. In addition, the 1.4036 high looks as though it completed an ABC correction from 1.2874 on the daily chart. It satisfies a fib relationship as well. Third, is the extreme sentiment against the USD and finally, the longer-term charts, weekly and monthly, show a downtrend in place.
On the hourly chart, I can trace five waves down to show an impulsive move that doesn't violate any Elliott rules. This is another hint, although not definitive, that 1.4036 was the high. Euro also violated a trend line from 1.3529.
After five waves down one would expect a correction. There is negative divergence between price and RSI. I've also traced out a faint ABCD pattern (suggesting a harmonic butterfly). Both support the idea of a correction. I'll take some partial profits here, knowing I can add to my position on the retracement or on a breakout below support.
Where might that correction go? The violated trend line at 1.3887 is one possibility. It would be very bearish if the pair touches that trend line and reverses. 1.3950/60 is the next possibility. If price gets much beyond there, I'd suggest that the pair might be taking another run to break the 1.4036 resistance.
© 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.
Euro has dropped to key support, touching 1.3805 this morning and forming a hammer on the hourly chart. The .382 retracement of 1.3429 to 1.4036 is 1.3803 so this is key support. If this doesn't hold, the next support is a zone between 1.3732 (50% retracement and last week's low) and 1.3685 (fib confluence).
The reasons I'm short, as I wrote yesterday, are that the move up from 1.3429, even though strong, didn't look impulsive. As a result, if it's not impulsive, but moving within a rectangle, it is corrective. In addition, the 1.4036 high looks as though it completed an ABC correction from 1.2874 on the daily chart. It satisfies a fib relationship as well. Third, is the extreme sentiment against the USD and finally, the longer-term charts, weekly and monthly, show a downtrend in place.
On the hourly chart, I can trace five waves down to show an impulsive move that doesn't violate any Elliott rules. This is another hint, although not definitive, that 1.4036 was the high. Euro also violated a trend line from 1.3529.
After five waves down one would expect a correction. There is negative divergence between price and RSI. I've also traced out a faint ABCD pattern (suggesting a harmonic butterfly). Both support the idea of a correction. I'll take some partial profits here, knowing I can add to my position on the retracement or on a breakout below support.
Where might that correction go? The violated trend line at 1.3887 is one possibility. It would be very bearish if the pair touches that trend line and reverses. 1.3950/60 is the next possibility. If price gets much beyond there, I'd suggest that the pair might be taking another run to break the 1.4036 resistance.
© 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, March 9, 2011
USDCHF—.618 holding for now
The pair has touched a low of .9269, .618 of the recent move up and the point where it took out my long position at breakeven.
Now I need to decide whether to enter again at .9300. The potential loss is 100 pips. Resistance is at .9360, .9506, .9586 and .9650. Only .9506 offers a decent 2:1 risk reward ratio but I can set a breakeven stop with a move of 30 pips or so. I can also watch price action at the .9300 mark and see if momentum provides a better clue. The reason I'd consider getting back in is the reason I went long in the first place. The dollar may have touched an important low. In additon, it looks as though the .618 will hold. We'll see.
© 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.
Now I need to decide whether to enter again at .9300. The potential loss is 100 pips. Resistance is at .9360, .9506, .9586 and .9650. Only .9506 offers a decent 2:1 risk reward ratio but I can set a breakeven stop with a move of 30 pips or so. I can also watch price action at the .9300 mark and see if momentum provides a better clue. The reason I'd consider getting back in is the reason I went long in the first place. The dollar may have touched an important low. In additon, it looks as though the .618 will hold. We'll see.
© 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.
GBPUSD—key support at 1.5963
After cable's March 2 high of 1.6344, the pair closed yesterday at 1.6159, below the 10- and 20-SMAs. This is the fourth, daily, lower close and the third day of lower highs. The high met long-term trend line resistance and was near the target for a monthly C wave at 1.6324. That, though, is if C is equal to .618 of the A wave so it is possible the pair is gearing up for another push upwards. I'm long from 1.6162.
A look at the weekly chart below shows that cable in the middle of an upward sloping rectangle. It is near a weekly resistance line at 1.6367 but if it can manage to push above this then it should be able to reach the top of the rectangle. The weekly ABC correction could have C ending at 1.6465 if C equals wave A (1.6192 was .618 of A).
As of now, the pair is well above key support. 1.5963 is the first key support level. This is .382 retracement of the entire move from 1.5345 and is the Feb. 11 low. Below 1.5751/25 would be very bearish as it would violate a long-term daily trend line and a prior low as well as be the .618 retracement from the move up from 1.5345.
Here's a weekly 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.
A look at the weekly chart below shows that cable in the middle of an upward sloping rectangle. It is near a weekly resistance line at 1.6367 but if it can manage to push above this then it should be able to reach the top of the rectangle. The weekly ABC correction could have C ending at 1.6465 if C equals wave A (1.6192 was .618 of A).
As of now, the pair is well above key support. 1.5963 is the first key support level. This is .382 retracement of the entire move from 1.5345 and is the Feb. 11 low. Below 1.5751/25 would be very bearish as it would violate a long-term daily trend line and a prior low as well as be the .618 retracement from the move up from 1.5345.
Here's a weekly 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.
EURUSD—unstable
Euro looks somewhat unstable since its 1.4036 high Monday. The low of 1.3856 this morning may have established a trend line low (second touch off the low of 1.3526). This would make sense as support since the February high was 1.3855. The .382 retracement of 1.3429 to 1.4036 is 1.3803. In order to maintain a bullish outlook, Euro needs to hold above this. If it doesn't, the next support is 1.3732.
I reversed the remainder of my long at 1.3924 (+ 58 pips after partial profits at +140 pips). I took partial profits and moved the stop to breakeven this morning.
The entire move up from 1.3429, while strong, doesn't look impulsive to me on the three-hour chart. No matter how you try to count it, you have wave four entering into wave one territory and that's something that can't happen with Elliott Wave. As a result, if it's not impulsive, but moving within a rectangle, it is corrective. On the daily chart, one could count an impulsive move but until price overtakes 1.4282, it's debatable. That's one reason I felt OK trying a short position.
Another reason is that on the daily chart, the 1.4036 high looks as though it completed an ABC correction from 1.2874 and it satisfies a fib relationship as well.
A third reason was the extreme sentiment against the USD. Finally, I think the longer term charts, weekly and monthly, show a downtrend in place.
I'll be willing to reverse again if signs point to that which is all you can do if you're going to trade charts. Let's face it: do you want to be "right" in your opinion or do you want to make money? That's the choice that should govern your trading.
Support is at 1.3900, 1.3880/56, 1.3803 (.382 of the move from 1.3429 to 1.4036) and 1.3732.
Resistance is 1.3950, 1.4036, and 1.4282/95 (Nov. 2010 swing high and weekly downtrend line from July 2008).
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.
I reversed the remainder of my long at 1.3924 (+ 58 pips after partial profits at +140 pips). I took partial profits and moved the stop to breakeven this morning.
The entire move up from 1.3429, while strong, doesn't look impulsive to me on the three-hour chart. No matter how you try to count it, you have wave four entering into wave one territory and that's something that can't happen with Elliott Wave. As a result, if it's not impulsive, but moving within a rectangle, it is corrective. On the daily chart, one could count an impulsive move but until price overtakes 1.4282, it's debatable. That's one reason I felt OK trying a short position.
Another reason is that on the daily chart, the 1.4036 high looks as though it completed an ABC correction from 1.2874 and it satisfies a fib relationship as well.
A third reason was the extreme sentiment against the USD. Finally, I think the longer term charts, weekly and monthly, show a downtrend in place.
I'll be willing to reverse again if signs point to that which is all you can do if you're going to trade charts. Let's face it: do you want to be "right" in your opinion or do you want to make money? That's the choice that should govern your trading.
Support is at 1.3900, 1.3880/56, 1.3803 (.382 of the move from 1.3429 to 1.4036) and 1.3732.
Resistance is 1.3950, 1.4036, and 1.4282/95 (Nov. 2010 swing high and weekly downtrend line from July 2008).
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.
Tuesday, March 8, 2011
EURUSD—stumbling
After Euro's high of 1.4036 yesterday morning, the pair is stumbling, falling to a low, so far, of 1.3913. That was expected—the pair was at the top of the resistance zone made up of trend lines, speed lines and price targets.
The bulls were strong enough to prevent an evening star formation on the three-hour chart that I wrote about yesterday. However the next candle after the third one was deeply bearish.
Support is at 1.3900, 1.3880/60, 1.3803 (.382 of the move from 1.3429 to 1.4036) and 1.3732.
Resistance is 1.4036, 1.4282/95 (Nov. 2010 swing high and weekly downtrend line from July 2008) and 1.4317/47.
© 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.
The bulls were strong enough to prevent an evening star formation on the three-hour chart that I wrote about yesterday. However the next candle after the third one was deeply bearish.
Support is at 1.3900, 1.3880/60, 1.3803 (.382 of the move from 1.3429 to 1.4036) and 1.3732.
Resistance is 1.4036, 1.4282/95 (Nov. 2010 swing high and weekly downtrend line from July 2008) and 1.4317/47.
© 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.
USDCHF—3 hour
Yesterday I bought this pair at .9269. It had a nice rise overnight but we'll have to see what happens as NorAm wakes up and weighs in. It's more than possible that some big organization in the USA, i.e. how do you spell central bank here, will beat the dollar down again as soon as it sees that it has rallied.
On the hourly chart (not shown), there's a completed evening star formation. The same thing could be in the process of forming on this chart. If so, support is at .9300 (.382 and prior price low), .9285, and .9269. The latter is the .618 of the recent move up and near where I bought but I've moved my stop to breakeven so I'd be out.
Resistance is at .9360, just above the recent high and at the top of the rectangle and near a speed line. After that it's at .9506, .9586 and .9650.
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.
Yesterday I bought this pair at .9269. It had a nice rise overnight but we'll have to see what happens as NorAm wakes up and weighs in. It's more than possible that some big organization in the USA, i.e. how do you spell central bank here, will beat the dollar down again as soon as it sees that it has rallied.
On the hourly chart (not shown), there's a completed evening star formation. The same thing could be in the process of forming on this chart. If so, support is at .9300 (.382 and prior price low), .9285, and .9269. The latter is the .618 of the recent move up and near where I bought but I've moved my stop to breakeven so I'd be out.
Resistance is at .9360, just above the recent high and at the top of the rectangle and near a speed line. After that it's at .9506, .9586 and .9650.
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.
USD Index—weekly
With all the negative sentiment, the greenback has continued to hold its uptrend line. This shows that if everyone is selling, there's nobody left to sell.
As I wrote last week, as long as it stays above 75.62, it's reasonable to expect a rally. There is no outstanding negative sell signal on the weekly chart. The trend, as difficult as it is to believe, is up for the last three years. However, there are strong rallies and equally strong pullbacks. The move down over the past eight weeks has a steep angle of descent which is difficult to maintain so I'd expect a rally because of this alone. In addition, the pair is also at the lower trend line. The next move, just as on the monthly chart with its triangle (not shown) should be up.
I wrote last week that the price targets for the monthly chart were 83.65, 85.00 and 87.73. The weekly chart adds a lower target of 79.02 (the downtrend line from the 2010 high of 88.66). Overcoming the prior high would require rising above 81.44.
RSI looks OK on the weekly chart. Note that it never dropped below 30—oversold—since 2008, despite the bearish sentiment.
If the index drops below 75.62, watch if it moves below 74.16. That would confirm a double top with its uh-oh connotations.
Here's the weekly 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.
As I wrote last week, as long as it stays above 75.62, it's reasonable to expect a rally. There is no outstanding negative sell signal on the weekly chart. The trend, as difficult as it is to believe, is up for the last three years. However, there are strong rallies and equally strong pullbacks. The move down over the past eight weeks has a steep angle of descent which is difficult to maintain so I'd expect a rally because of this alone. In addition, the pair is also at the lower trend line. The next move, just as on the monthly chart with its triangle (not shown) should be up.
I wrote last week that the price targets for the monthly chart were 83.65, 85.00 and 87.73. The weekly chart adds a lower target of 79.02 (the downtrend line from the 2010 high of 88.66). Overcoming the prior high would require rising above 81.44.
RSI looks OK on the weekly chart. Note that it never dropped below 30—oversold—since 2008, despite the bearish sentiment.
If the index drops below 75.62, watch if it moves below 74.16. That would confirm a double top with its uh-oh connotations.
Here's the weekly 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.
Monday, March 7, 2011
EURJPY—spike high
A shooting star candle spiked at a high of 116.01 on Friday. The pair closed at 115.14, the highest weekly close since May 2010. On the daily chart, the 50 simple moving average (SMA) crossed above the 200 SMA. This is a golden cross. Some see them as bullish. There have been three golden crosses on the daily chart in the last ten years (Fall 2005, May 2008 and May of 2009). The first two were bullish; the last one was for a period of sideways movement before prices headed down. Not much of a sample size from which to draw conclusions. I have price targets that are quite a bit higher in the 119 area. The pair has been in an uptrend since January.
Shooting stars occur when price opens near the low, rises sharply, and then settles near the low. Psychologically, it means the bulls couldn't maintain the highs, in this case because of profit taking when the price climbed above the prior high. This could be signaling a reversal. However, Thursday's candle was bullish and there has been little in the way of upper shadows over the past several days. If this star becomes part of an evening star formation (today's candle would have to close deeply within Thursday's candle), it will be significant. On the daily chart, there is negative divergence.
On the monthly chart I posted last week, I noted the bear flag formation with the upper boundary at 116.14. If price consolidates just below this resistance, expect another attack on it later this week or next week. The lower boundary of the flag is 107.40.
Resistance is at 116.01, 116.88/97, 118.22, 118.73 and 119.23.
Support is at 115.69, 114.85/50, 114.00 and 113.13.
Here's the daily 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.
Shooting stars occur when price opens near the low, rises sharply, and then settles near the low. Psychologically, it means the bulls couldn't maintain the highs, in this case because of profit taking when the price climbed above the prior high. This could be signaling a reversal. However, Thursday's candle was bullish and there has been little in the way of upper shadows over the past several days. If this star becomes part of an evening star formation (today's candle would have to close deeply within Thursday's candle), it will be significant. On the daily chart, there is negative divergence.
On the monthly chart I posted last week, I noted the bear flag formation with the upper boundary at 116.14. If price consolidates just below this resistance, expect another attack on it later this week or next week. The lower boundary of the flag is 107.40.
Resistance is at 116.01, 116.88/97, 118.22, 118.73 and 119.23.
Support is at 115.69, 114.85/50, 114.00 and 113.13.
Here's the daily 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.
EURUSD—resistance
Euro has hit a high of 1.4036 this morning. This is close to the top of the resistance zone I wrote about last Monday of 1.3993 and 1.4042. This zone came from the downtrend line on the daily chart from Nov. 2009 as well as a speed line from the 1.1902 low. The speed line is now at 1.4065 but this is also near a crossing of two speed lines, the second one from the 1.2974 low. There should be some profit taking. It looks as though that's happening. I'm still long from 1.3866 but took partial profits at +140 pips.
The three-hour chart shows the potential for an evening star. The first and second candles of the three-candle pattern have formed. The confirmation will be if this third candle currently forming closes deep into the first candle. This first candle ranged from 1.3956 to 1.4031.
Support is at 1.3956 today's low and the rectangle boundary), 1.3900, 1.3880/61, 1.3803 and 1.3732.
Resistance is 1.4282/95 (Nov. 2010 swing high and weekly downtrend line from 2008) and 1.4317/47.
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.
The three-hour chart shows the potential for an evening star. The first and second candles of the three-candle pattern have formed. The confirmation will be if this third candle currently forming closes deep into the first candle. This first candle ranged from 1.3956 to 1.4031.
Support is at 1.3956 today's low and the rectangle boundary), 1.3900, 1.3880/61, 1.3803 and 1.3732.
Resistance is 1.4282/95 (Nov. 2010 swing high and weekly downtrend line from 2008) and 1.4317/47.
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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