EURUSD—weaker

It appears as though 1.44 is a struggle for the Euro. The high was 1.4336 in the last hourly candle. Euro then dropped to a low of 1.4212, breaking below what may in fact be a bear flag on the daily chart. Target of the flag is a heart-stopping 1.3350. That is a bit far away to get excited about, especially since there are significant support levels before that. The nearest one is a strong confluence zone at 1.4169/28. Additional support is at the May 16 low is 1.4067, then 1.3890, the .382 retracement of the move up from 1.2874.

If the pair is going to rally, it needs to overtake 1.44. However, the first target to get excited about is the channel from the beginning of the year at 1.4671.

Yesterday I went long at 1.4237 and was stopped out at +40 pips—another insignificant trade. As I blogged yesterday, where does one decide to get back in? Since the pair is now throwing off signals that it is weakening, I will most likely look for short entries. The lower boundary of the bear flag at 1.4246 is one possibility but I will be keeping an eye on momentum. If the pair breaks 1.4200, that is another sign of weakness.

Here is 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—1.44 in site

Yesterday, I wrote that 1.4319 was a likely target and Euro touched 1.4307 last night before falling back to a low of 1.4207, thus taking out my long position I had established at 1.4188. I probably should have left the stop at breakeven—19 pips isn't worth waking up for—but that's neither here nor there. The question, once taken out, is does one get back in? If so, where? It always amazes me that traders who get stopped out don't have a clue as to the answers to these questions.

On the short, three-hour chart, I think it's possible the Euro can get to 1.4400 but it seems as though it's going to be a long grind. The high last night of 1.4307 was only 20 pips higher than the day before. Obviously, there is some pressure on the pair. However, as long as the Euro stays above 1.4261, higher highs are possible. 1.4390 is .382 of the move down from 1.4942 to 1.4049 and 1.4342 is .618 of the move down from 1.4588. 1.4440 is 1.618 of the A leg of the ABC correction I wrote about yesterday. Moving right along the upper boundary of the rectangle on the three-hour chart, the boundary hits a confluence point around 1.4386. So, I entered long again earlier this morning, albeit at a much less attractive price than yesterday (1.4237 versus the prior 1.4188).

© 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

The Euro touched a 1.4287 high late last night, just above the weekly 10 EMA of 1.4261. As I wrote on Monday, the weekly 10 EMA has been support since early March. Now it looks as though it may be serving as resistance.

On the three-hour chart, the pair might be in an ABC correction beginning with the low of 1.4049, going to A at 1.4244 and B at 1.4124. The potential price for C is 1.4245, 1.4319, or 1.4440. Of the three, I like 1.4319 (where C equals A) since that equates with 1.4326 which would be the top of the rectangle. This is also near a .382 retracement of the move down from 1.4548.

Support is at 1.4121 and 1.4049.

I went long yesterday at 1.4188. Obviously, I have moved my stop to breakeven.

Here's a 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—hourly chart

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.

Trouble posting

Ever since my main computer upgraded to IE 9, I'm having a lot of trouble posting.

AUDUSD—triangle

Aussie is still below its broken trend line. The dip to 1.0514 took it slightly below last week's hammer low of 1.0537. This is not good. It is currently coiling within a symmetrical triangle. Symmetrical triangles are often continuation moves although they do not have to be. From an Elliott perspective, a triangle always resolves with price action continuing in the direction from which it entered the triangle, downward in this case. Looking at price behavior from the high of 1.1012, an ABC correction is taking place, with the C wave unfolding. The potential price for the C wave is 1.0595 at .618 of A, 1.0414 where it would be equal to A, and 1.0120 where it would be 1.618 of A.

There is some good support 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).

Triangle resistance is 1.0604. There should be one more move up to this price before prices break downward (if they are going to break downward). Short-term price resistance is at 1.0642 and 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.

EURUSD—key support

The Euro dipped below a daily key support range of 1.4115/84 with its dip to Friday’s low of 1.4067. It closed at 1.4118 which is just within the range. The prior price low on April 18 was 1.4157.

On the weekly chart, the close was between the 10 (1.4261) and 20 (1.4041) weekly EMA. The 10 EMA has been support since the week ending 4 March 2011. Notably, price broke the weekly uptrend line drawn from January and RSI dipped below its uptrend line. Trend line breaks are a warning. In addition, it’s a nice ABC correction, chart wise (however charts don’t make the moves).

If price can’t stabilize here, then the break of the weekly EMA 20, price support, and the psychological 1.40 leads to a major support zone from 1.3852 to 1.3908. There are several components to this support zone. 1.3908 is 50% of the move from 1.2874 to 1.4942 and 1.3902 is the weekly pivot S2 support. 1.3862 was .618 of the move down from the Nov. 2009 high of 1.5144 to 1.1876. 1.3852 is parity. All this will make for a very strong support zone. If this zone breaks, then 1.3500 is possible. That would be at the uptrend line from the 1.1876 low in June 2010.

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.

Week High, Low, Close