AUDUSD—3-hour price

On the regular 3-hour price chart, the Aussie formed a hammer candle at the low. However, it broke its uptrend line on the way down and I take trend lines seriously. Nonetheless, based on the hammer and the P&F chart support I blogged about below, I bought yesterday at 1.0618. Note, though, that it's at the short-term downtrend line resistance. This could be 4th wave, the remnant of the prior uptrend. Time to take a little off the table in the way of profits.

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.

AUDUSD—P&F

On my three-hour point and figure chart (P&F), the 45° internal support line held yesterday's drop to 1.0537.
A P&F chart shows only price change and disregards time. Because the chart does not change unless price changes by a predetermined amount, many see these types of charts as a way of depicting uncontaminated supply and demand. There is also a belief it shows volume indirectly since price does not usually change unless there is volume behind the change.

The "X" column means price is increasing; the "0" column, that it is decreasing. The 45° support line is more objective than trend lines drawn on regular price charts (at least according to aficionados of the method).

I find the use of P&F charts valuable but use them as an adjunct to my other approaches.

Here is the 3-hour chart for the AUDUSD. I draw it on a closing basis for the three-hour period. One can see that the The 45° support line held nicely and the pair has rallied. This line was also at the point of a triple breakout on the chart. Resistance on this chart is now at 1.0950.













© 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—nearing major support

Most recent low is 1.4654. The 38.2% retracement of the move from 1.4157 to 1.4882 is 1.4605; 50% retracement is 1.4520. The April congestion zone was also around 1.4520. The annual pivot calculation for R1 is 1.4683. The monthly pivot is 1.4584; weekly S1 is 1.4573.

What this means is the Euro is in a strong support zone from here down to 1.4520. That's 130 pips below the most recent low so the zone is rather large. However, it also means that it could base anywhere in this zone. Obviously, if it breaks 1.4520, it's huah for the bears, especially if there is a weekly close below here.

© 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—weekly support

Weekly support from the steep uptrend line drawn from .9706 is 1.0647. The most recent low is 1.0643. A break below this opens up 1.0570 and 1.0444.

It's also possible the pair will base here. Watch momentum on the shorter-term charts. For example, on the one-hour chart, there is positive divergence with RSI.

EURUSD—Coiling

On the three and one-hour charts, Euro is coiling in a symmetrical triangle. From an Elliott point of view, a triangle is a continuation move with a price target around 1.5015. Note that there would be one more leg down on this triangle to complete the E leg. Thus, one could go long if it reaches this, around 1.4790.

There is short-term negative divergence with RSI on the three-hour chart, although longer term, price and RSI remain in an uptrend together. The triangle also followed a broadening pattern. Broadening patterns after highs are often deadly. However, the combination of the broadening pattern and the triangle result in a rough diamond pattern. If this is a diamond, subsequent moves are usually rapid.

Support is at 1.4790, 1.4728/11, 1.4689, 1.4639, 1.4528 and 1.4496. First resistance is 1.4902, then 1.4961 and 1.5000/15. After that, there is 1.5105/16, 1.5163 and a potential price target at 1.5163.

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.

No posts today, Tuesday

EURUSD—possible price resistance, support and targets

If the market continues to hammer the USD, Euro will likely continue to rise. What are some possible resistance levels and price targets?

Weekly pivot calculations provide an R1 resistance level at 1.4961 and R2 at 1.5116. The latter ties nicely with the monthly R1 level at 1.5105. On the weekly chart, one can identify an ABC correction. A begins at 1.1876 with a three wave move up to 1.4283; B ends at 1.2859; and C is in progress with a target of 1.5266.

Another way of looking at this entire move is to consider it a harmonic move on the weekly chart of AB=CD with C to D still in progress. Taking the B to C retracement, would result in a price target of 1.5163. That is close to the resistance levels from the pivot calculations above. Looking at the monthly chart, one can trace out an AB=CD move in progress (AB=1.1876 to 1.4283 with C beginning at 1.2971) and the target is 1.5378. I think that is the high end for any move.

Support is at 1.4728/11, 1.4520, 1.4450/34, and a strong zone in the 1.4184/15 range.

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.

March to April results

April was especially nice if one was long Aussie, Euro or Cable to the USD. The USD took a beating everywhere. EURGBP went almost nowhere.

Weekly High Low Close