tag:blogger.com,1999:blog-43986763856882391232024-03-05T18:08:29.868-05:00Forex ReflectionsA blog that combines philosophy, psychology and technical analysis in regards to Forex tradingFlorida Forex Traderhttp://www.blogger.com/profile/14185457722643140364noreply@blogger.comBlogger1434125tag:blogger.com,1999:blog-4398676385688239123.post-21900216195321745982011-07-19T06:16:00.002-04:002011-07-19T06:16:44.000-04:00HiatusI'm taking a little bit of a hiatus from the blog. It's something I do for free in my spare time and I have enjoyed doing so, but right now it's a bit too much. I also want to think about its future direction.Florida Forex Traderhttp://www.blogger.com/profile/14185457722643140364noreply@blogger.com0tag:blogger.com,1999:blog-4398676385688239123.post-27735719657399437562011-07-13T09:00:00.000-04:002011-07-13T09:00:17.616-04:00EURUSD—bounceThe bounce has been stronger than some expected. One can now trace out a potential ABC correction on the three-hour chart of 1.3827 to 1.4054 for A and down to 1.3952 for B. If C were to equal A, the price target would be 1.4169. Price has stalled at 1.4111 but now seems to be attempting to base at 1.4053 (actually it has dropped slightly below) on the 15-minute chart. Since that was the high for the A leg of this scenario, one might see a move to 1.618 of A or 1.4303. I actually like 1.4303 since that aligns with a bounce I’d expect on my point and figure chart in order to create a stronger sell signal. It is also close to the 50% retracement point of the move down from 1.4578.<br />
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There is a former confluence zone of 1.4112 to 1.4163 on the shorter-term charts. This correlates with the resistance zone I wrote about yesterday of 1.41 to 1.42. The broken monthly uptrend line is at 1.4147. Certainly if price gets above 1.42, it makes the 1.43 target more achievable. There does seem to be a more positive attitude to risk this morning.<br />
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Would one go long here then, hoping to pick up a hundred pips or so? Not necessarily. However, to do so, would require watching the short-term charts for both price behavior and momentum. If one believes that the downward move that began Monday is indicative of an Elliott wave three, one would want to sell rallies. <br />
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© 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. <br />
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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.Florida Forex Traderhttp://www.blogger.com/profile/14185457722643140364noreply@blogger.com0tag:blogger.com,1999:blog-4398676385688239123.post-82228773966119050262011-07-12T09:05:00.000-04:002011-07-12T09:05:13.950-04:00EURUSD—SummaryI’ve been on vacation the last week and am not fully back but have taken my first peek at the markets in a week this morning. There is much going on with the Euro.<br />
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First, on the monthly chart, the pair has broken the steeply ascending uptrend line with its drop yesterday. That is not too surprising—steep angles are difficult to maintain. The question is whether this is now the wave three down that an Elliott interpretation supports. <br />
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Euro never regained the 1.4697 prior high which shows weakness. From a daily perspective, the potential bullish triangle appears nullified by yesterday’s drop. On my daily point and figure (P&F) chart, the pair generated a sell signal.<br />
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The low this morning was 1.3837, forming a hammer on the three-hour chart. The pair has bounced sharply from there but on the 15-minute chart, price action appears to be tracing out a three-wave correction. If so, the C wave high so far of 1.4024 is not quite equal to the A wave (1.3827 to 1.3963). If the C wave is 1.618 of A, the high will be 1.4107. <br />
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There is a resistance zone from 1.41 to 1.42. This includes the potential wave C high, the broken monthly uptrend line of 1.4147 and price resistance. Beyond that is 1.4340. However, there is strong support at 1.3820/37 and the 200 daily SMA is at 1.3912. If the pair breaks the 1.3820 support, there should be additional moves down in line with the third wave scenario that may be playing out.<br />
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© 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. <br />
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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.Florida Forex Traderhttp://www.blogger.com/profile/14185457722643140364noreply@blogger.com0tag:blogger.com,1999:blog-4398676385688239123.post-55044842113726355302011-07-05T22:16:00.001-04:002011-07-05T22:16:20.419-04:00No posts week of July 4thI'm taking a few days off.Florida Forex Traderhttp://www.blogger.com/profile/14185457722643140364noreply@blogger.com0tag:blogger.com,1999:blog-4398676385688239123.post-6224766653900992822011-07-01T07:50:00.000-04:002011-07-01T07:50:56.101-04:00Have a save and happy July 4th weekend.<div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhyZKkPxXyO7PwpCrxigc-YDkfNi2hlFpB5ltYQiFd0LvgzIIeUjY8lbDiYpY6MWAzU7CIV48cspK55Q_3ZKXBz0zJZeU4GcZCmzJnNm1ya1XLzqNlQdGcQntaGTGaY5YTADMboALGaua5x/s1600/kids+July4.gif" imageanchor="1" style="clear:left; float:left;margin-right:1em; margin-bottom:1em"><img border="0" height="283" width="325" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhyZKkPxXyO7PwpCrxigc-YDkfNi2hlFpB5ltYQiFd0LvgzIIeUjY8lbDiYpY6MWAzU7CIV48cspK55Q_3ZKXBz0zJZeU4GcZCmzJnNm1ya1XLzqNlQdGcQntaGTGaY5YTADMboALGaua5x/s400/kids+July4.gif" /></a></div>Florida Forex Traderhttp://www.blogger.com/profile/14185457722643140364noreply@blogger.com0tag:blogger.com,1999:blog-4398676385688239123.post-60597500084739343782011-06-30T06:17:00.000-04:002011-06-30T06:17:55.432-04:00EURUSD—mixed signalsEuro managed to break above key resistance at 1.4450, reaching a high of 1.4521. Price is stumbling a bit now. The most bullish case is that there is an Elliott triangle forming. If one assumes that point D was 1.4521, then there should be a move down, possibly to 1.4141 (although sometimes price falls short of E before thrusting out of the triangle) and then new highs. That scenario ties in with a butterfly pattern that may be forming where the end of the butterfly would be around 1.52. Continuing this bullish fantasy, this would mean we were ready to pull out of wave four for a fifth wave move (wave one starting at 1.1876). A potential target, using the golden section, would be 1.5264. Hmm. Pretty close to the butterfly target. Supporting this bullish heresy would be the point I made the other day—RSI isn't dropping significantly on the daily chart, even when Euro finds new lows. <br />
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If one looks at price action from the perspective of an ABC correction off the top of 1.4942, wave C would have been .618 of wave A at 1.4096. The low was 1.4074 before price began moving up. <br />
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Forgetting the Elliott interpretation, there is a symmetrical triangle. These can be a continuation move but can also signal a potential reversal. Price is above the 50-, 100-, and 200-SMA on the daily charts.<br />
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Finally, on the four-hour chart, one might say a double bottom formed at 1.4074 and 1.4103 with it confirmed at 1.4442. The target for this is about 1.4784. This target takes it above the 1.4697, a number important to Elliott bears. <br />
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Whatever else one can say about the upward price move from yesterday, it took out a number of stops from short sellers. The market loves to do that but I consider it a warning for higher prices.<br />
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Looking at the downside from an Elliott perspective, one can maintain that wave two peaked at 1.4697. Price is at the beginning of wave three and although one would prefer less upward price action, as long as price stays below 1.4697, one can maintain this interpretation. One can dismiss the alternate bullish triangle by saying the ratios between the legs are not quite right. If this is true, the targets are attractive<br />
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I'm leaning less bearish than I was because I'm not seeing a relationship between price and momentum on the hourly chart. I blogged about this on June 22. RSI drops below 70 but price does not move down much. Still, the pair is at resistance and then next resistance is 1.4550/1.4600 so behavior there may tell the story.<br />
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There is short-term support at 1.4450/42, 1.4328 and 1.4238. The latter two look as though it is a transposition of numbers but it is actually the June 29 and June 28 low respectively.<br />
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Here's the four-hour chart:<br />
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<div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjJOU_cM9KilBX2JXZ30BIhyphenhyphenmQDv4sm8O5UAyw8yZQ2nify54CcSdij0US6a7ZffGb66xdtF2tHYcFuCSdTk6QrLwihi8HBWkh4L8LDlVKe2p-KgSVh-phyphenhyphenVjkfNfBJb0sX79cmGV1kkdUM/s1600/20110630+EU+4H.png" imageanchor="1" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"><img border="0" height="269px" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjJOU_cM9KilBX2JXZ30BIhyphenhyphenmQDv4sm8O5UAyw8yZQ2nify54CcSdij0US6a7ZffGb66xdtF2tHYcFuCSdTk6QrLwihi8HBWkh4L8LDlVKe2p-KgSVh-phyphenhyphenVjkfNfBJb0sX79cmGV1kkdUM/s400/20110630+EU+4H.png" width="400px" /></a></div><br />
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© 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. <br />
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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.Florida Forex Traderhttp://www.blogger.com/profile/14185457722643140364noreply@blogger.com0tag:blogger.com,1999:blog-4398676385688239123.post-12596366342642604962011-06-29T15:44:00.000-04:002011-06-29T15:44:31.657-04:00EURUSD—Time to fish or cut baitAfter a thwarted attempt to get above 1.4442 yesterday, Euro has been hanging about just below the key 1.4450 level since early this morning. If it manages to break through, look for a move to 1.4600 then 1.4697. Above that would negate a bearish case for the most part. If it breaks below 1.4103, this would confirm a double top. <br />
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© 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. <br />
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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.Florida Forex Traderhttp://www.blogger.com/profile/14185457722643140364noreply@blogger.com0tag:blogger.com,1999:blog-4398676385688239123.post-78946019772354874812011-06-28T10:25:00.002-04:002011-06-28T10:25:36.524-04:00EURUSD—short-term momentumEuro has pushed up to 1.4370 with good momentum on the short-term charts. If it easily takes out 1.4385 and the psychological 1.44, the key resistance of 1.4428/50 will be the next target. <br />
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© 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. <br />
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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.Florida Forex Traderhttp://www.blogger.com/profile/14185457722643140364noreply@blogger.com0tag:blogger.com,1999:blog-4398676385688239123.post-89297842666877236032011-06-28T09:46:00.001-04:002011-06-28T09:46:52.141-04:00EURUSD—waveringThe 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. <br />
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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. <br />
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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. <br />
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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. <br />
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I may try a short in the 1.4340/85 area. I'll post a chart when there is a more definitive move.<br />
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© 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. <br />
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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.Florida Forex Traderhttp://www.blogger.com/profile/14185457722643140364noreply@blogger.com0tag:blogger.com,1999:blog-4398676385688239123.post-92207741526127793392011-06-27T10:45:00.000-04:002011-06-27T10:45:52.149-04:00Friday close, pivot, SMAFor each of the following nine pairs, I've listed the Friday close, the annual pivot points, the 200- and 100-SMA, and the close for 31 Dec. 2010. I look at a series of comparisons such as this every week. While I don't care so much where a market has been as where it is going, some items pop out when you compare various parameters. <br />
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First, all pairs except for USD led pairs (USDCAD, USDCHF, and USDCHF) are above their 2010 year-end close. This is generally positive. However, if one considers the highs for the year for each pair, all pairs that are above their 2010 close are below their highs for the year. Of the three below their 2010 close, the USDCAD and USDJPY are above their lows. <br />
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Five pairs are below their annual pivot points. In addition to the USD-led pairs mentioned above, both EURJPY and GBPJPY are below. <br />
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Four pairs are above their daily 200-SMA. These are AUDUSD, EURGBP, EURJPY (barely), and EURUSD. When price is below a 200-day SMA, it is often bearish. Three pairs are above their daily 100-SMA, AUDUSD, EURGBP, and USDCAD. Surprising about the latter—it is worth watching to see if it maintains that and the 100 serves as support. <br />
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I also watch the 50-daily SMA and I am always interested when there is a 50 crossing the 100 or 200, particularly if it occurs in conjunction with a pattern. <br />
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Nothing here is definitive unless used in conjunction with other analysis. It is just something to think about. <br />
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<div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEh8FgMcda_tlQav9BlTS8nGfzQM42Tb7Esfk6lmF4ihbhcolE973MyWUwD0X8KFvtZ4Xfg3W_8B_rgvFLWW3RiUC8wNglMC42GW8VtMdS-Oj2LdA8BxcLkRIFHs6mi_3nfLq2cSCItcbHb1/s1600/20110627+Pivots+MAs.png" imageanchor="1" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"><img border="0" height="116px" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEh8FgMcda_tlQav9BlTS8nGfzQM42Tb7Esfk6lmF4ihbhcolE973MyWUwD0X8KFvtZ4Xfg3W_8B_rgvFLWW3RiUC8wNglMC42GW8VtMdS-Oj2LdA8BxcLkRIFHs6mi_3nfLq2cSCItcbHb1/s400/20110627+Pivots+MAs.png" width="400px" /></a></div><br />
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© 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. <br />
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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.Florida Forex Traderhttp://www.blogger.com/profile/14185457722643140364noreply@blogger.com0tag:blogger.com,1999:blog-4398676385688239123.post-7100357425147831822011-06-24T09:03:00.001-04:002011-06-24T09:03:41.490-04:00No posts todayI'm implementing my summer Friday's off rule effective today. I'll see you Monday.Florida Forex Traderhttp://www.blogger.com/profile/14185457722643140364noreply@blogger.com0tag:blogger.com,1999:blog-4398676385688239123.post-64368385593112161432011-06-23T08:28:00.001-04:002011-06-23T08:28:13.805-04:00EURUSD—broke 1.42A bit of battle between buyers and sellers went on between 1.4212 and 1.4236 but supply prevailed (so far) and has pushed Euro to a low of 1.4187. This is just below the June 20 low of 1.4192. It would strengthen the bearish case to have an hourly close below there. <br />
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© 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. <br />
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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.Florida Forex Traderhttp://www.blogger.com/profile/14185457722643140364noreply@blogger.com0tag:blogger.com,1999:blog-4398676385688239123.post-88160413549658112692011-06-23T06:32:00.000-04:002011-06-23T06:32:16.471-04:00EURUSD—lowerKey resistance at 1.4428/50 held nicely. Euro broke below the uptrend line of the rectangle and the 21-SMA on the four-hour chart that I blogged about yesterday. The low so far this morning is 1.4235. This implies that the move up from 1.4074 was an ABC correction (A= 1.4074/1.4340; b=1.4340/1.4192 and C topped out close to the point where C would equal A). <br />
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I missed the break, having knocked off early yesterday to run around town checking out dog kennels for boarding our puppy. Sometimes the home front calls. However, a rally is possible, given that the current low is close to the 50% point of the move up from 1.4074 to 1.4442. The pair might rally to 1.4328 (the 21-SMA on the four hour chart) or 1.4381, the breakout point from the rectangle. Additional resistance derives from the weekly 10-EMA (1.4317), and two fib levels (.382 of 1.3429/1.4942 at 1.4364 and .382 of 1.4942/1.3970 at 1.4341). With a rally, I'd sell weakness. If the rally does not happen (and it might not if we're in a third wave), then I will enter on smaller rallies with weakness on much shorter-term charts.<br />
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However, it's important to remember that until price drops below 1.4074, thus creating a lower low, there is still resistance up to 1.4697. <br />
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© 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. <br />
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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.Florida Forex Traderhttp://www.blogger.com/profile/14185457722643140364noreply@blogger.com0tag:blogger.com,1999:blog-4398676385688239123.post-50749675231435573282011-06-22T09:54:00.000-04:002011-06-22T09:54:38.713-04:00EURGBP—contrast with EURUSDContrast the EURGBP with the price behavior of EURUSD. On the four-hour chart, there is strong move up, especially with the last two candles. This pair, too, is rising within an upward sloping rectangle so it is time to take some profits on my long as it approaches that point. The longer, downtrend resistance line is coming in just above that boundary. However, note that unlike the Euro, momentum, as reflected in RSI, is also maintaining its uptrend line. It is interesting that on this pair, as with the Euro, the 21-SMA is tracking the lower boundary of the rectangle. <br />
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EURGBP offered clearer buying signals after weekend analysis than did EURUSD. For example, the week ending 17 June closed with a hammer candle near a support level in the context of what appeared to be a corrective move within an overall uptrend. <br />
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Resistance is at .8938/76 (monthly pivot R2, downtrend line, rectangle upper boundary, June 8 high) and .9044. <br />
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Here is the four-hour chart:<br />
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<div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhvyZlx2n4WcYov-dBbO8fGuxCO2B_JG0JfYi_zedUF8cqkkJwD2W7UEgsOZIK0Q9otAESIQebXIBMu3Rvhk8a7_atp6ZGlKj0Cram4kBB2ihbc6ySyNsg1iNwaeh3g3ktDfRUKwAJPadoq/s1600/20110622+EG+4H.png" imageanchor="1" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"><img border="0" height="239px" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhvyZlx2n4WcYov-dBbO8fGuxCO2B_JG0JfYi_zedUF8cqkkJwD2W7UEgsOZIK0Q9otAESIQebXIBMu3Rvhk8a7_atp6ZGlKj0Cram4kBB2ihbc6ySyNsg1iNwaeh3g3ktDfRUKwAJPadoq/s400/20110622+EG+4H.png" width="400px" /></a></div><br />
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© 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. <br />
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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.Florida Forex Traderhttp://www.blogger.com/profile/14185457722643140364noreply@blogger.com0tag:blogger.com,1999:blog-4398676385688239123.post-9171520816777672752011-06-22T09:33:00.000-04:002011-06-22T09:33:28.665-04:00EURUSD—hovering near key resistanceEuro managed to climb to 1.4434 within an upward sloping rectangle. On the four-hour chart, the 21 SMA is tracking the lower boundary of the rectangle. Key resistance is 1.4428/50. The fact that price is hanging around just below here is troublesome to bears—when price maintains a narrow range beneath a key resistance it often manages to break through. If it does so, there is psychological resistance at 1.45. After that is 1.4573—the upper boundary of the rectangle and the point where the downtrend line from 1.4942 comes in. Finally, there is key resistance at 1.4697, the prior high.<br />
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There does not appear to be strong momentum behind the pair, i.e. note that RSI has fallen below its uptrend line. If price falls below its uptrend line, that confirms weakness in the pair. Candles on the four-hour chart are exhibiting upper and lower shadows. This indicates indecision. There needs to be a strong move in one direction or another for traders to jump in and rev up the momentum. <br />
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Best approach for now is to wait for a clear sell or buy signal. As I wrote yesterday, a push to 1.45 or above on the hourly chart where RSI moves into overbought territory (above 70), followed by RSI closing below 70 would be a sell signal, especially if combined with a bearish candle formation. A strong move above 1.4573, especially with a retest, would be a buy signal. My suspicion is that price is in a third wave down in the larger period so I am more inclined to look for a sell signal. However, once I recognize this bias I have to be alert to not let the bias drive my trading and pay close attention to the chart.<br />
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Here's the four-hour chart: <br />
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<div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgGuIM2meEGiDe0QWAhQl_KmTGJvm1Z5OTk1T6EmaRRv9D1h7adH3uRJ2zgbPjM7bcAq7yQQeCqPE_TyznonYuOkO0gpiYrm0jGjMI4bmSHDc4Hf78YgKdQnnqU4a_IOcfWl_xroVpapcnT/s1600/20110622+EU+4H.png" imageanchor="1" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"><img border="0" height="225px" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgGuIM2meEGiDe0QWAhQl_KmTGJvm1Z5OTk1T6EmaRRv9D1h7adH3uRJ2zgbPjM7bcAq7yQQeCqPE_TyznonYuOkO0gpiYrm0jGjMI4bmSHDc4Hf78YgKdQnnqU4a_IOcfWl_xroVpapcnT/s400/20110622+EU+4H.png" width="400px" /></a></div><br />
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© 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.<br />
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.Florida Forex Traderhttp://www.blogger.com/profile/14185457722643140364noreply@blogger.com0tag:blogger.com,1999:blog-4398676385688239123.post-33406269133433272482011-06-21T08:23:00.001-04:002011-06-21T08:23:31.798-04:00EURUSD—narrow rangeEuro is wavering in one of those narrow ranges so far this week between 1.4291 and 1.4384, no doubt by short-term fundamental, kneejerk focus on Greece. This is under key resistance at 1.4428/50. Even if it rallies above there, it's doubtful it will get beyond 1.4697 but of course that is a lot of pips between the two. <br />
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I am out completely as of now. My plan is to wait to find a selling opportunity. To do this, I'll use resistance and momentum on the hourly chart. Ideally, I would like to see a push to 1.45 or above where RSI moves into overbought territory (above 70). I would then wait for an hourly close below 70 and short at that point. That combination should provide for a tight stop. <br />
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The more bullish possibility in the short term is that Euro may be tracing out a butterfly pattern on the daily chart. Given that the upward sloping rectangle on the weekly chart (see Monday's blog) constrains prices between 1.3564 and 1.5368, 1.5308 (1.27 of the XA leg) is within that realm of possibility. For this to be possible, price needs to clear 1.4942 and there would probably be momentum clues well before then that the move up was gaining strength.<br />
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© 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. <br />
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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.Florida Forex Traderhttp://www.blogger.com/profile/14185457722643140364noreply@blogger.com0tag:blogger.com,1999:blog-4398676385688239123.post-74954090638903606622011-06-20T04:55:00.001-04:002011-06-20T04:55:00.062-04:00USD Index—monthlyI have not blogged about the dollar index recently. On the monthly chart, one can make the case for a move up from the bottom of the symmetrical triangle where it will find resistance at either the longer term downtrend line (80.47) or the upper boundary of the triangle at 88.49. The move from 89.63 down to 74.15 (1,548) had a nice balance with the move from 88.66 down to 72.69 (1,597). <br />
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Any drop below 72.69 would be bearish. It would also raise the possibility that there is a double top in with the confirmation point at 73.50. The price target would be 69.81. No doubt that would bring on the same tired response from the US Treasury that “we support a strong dollar.” <br />
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Nonetheless, given the potential weakness in the Euro and other currencies relative to the USD, I think a rally is more probable. <br />
Here’s the monthly chart:<br />
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<div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhdATUOHVdVwOLQID-4Wj3M5M-nSHaWc6KT9NHue9X1Tu8WPcLFE2dzU_1G1auLeAkd2nkFFk1YlSYafExtN5_I-5-DxkLxnctxvI75mpp-ttLcUJze_xwlOHOM8IAaXANCJdYXhPc5D54p/s1600/20110618+USDX+M.png" imageanchor="1" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"><img border="0" height="182px" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhdATUOHVdVwOLQID-4Wj3M5M-nSHaWc6KT9NHue9X1Tu8WPcLFE2dzU_1G1auLeAkd2nkFFk1YlSYafExtN5_I-5-DxkLxnctxvI75mpp-ttLcUJze_xwlOHOM8IAaXANCJdYXhPc5D54p/s400/20110618+USDX+M.png" width="400px" /></a></div><br />
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© 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. <br />
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.Florida Forex Traderhttp://www.blogger.com/profile/14185457722643140364noreply@blogger.com0tag:blogger.com,1999:blog-4398676385688239123.post-78656473742872691242011-06-20T04:15:00.001-04:002011-06-20T04:15:00.306-04:00EURUSD—weekly analysisEuro is at a critical point on the weekly chart. The week ending 6/17 had a low of 1.4074 and formed a hammer candle on the weekly chart. Since 1.4074 is in a solid support zone, Euro needs to stay above this low. This support zone is drawn from pivot calculations, fib retracements and price. However, note that on the weekly chart below, it is also the area where the downtrend line from the 1.6041, 2008 high meets a shorter-term uptrend line from the 1.2874 low. Bears and bulls are battling it out here.<br />
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From the Elliott Wave perspective, price action does not look bullish on the weekly chart. There is a three-wave move from 1.1876 to 1.4283 and then another three-wave move from there down to 1.3970. Alternatively, one could say there’s an X joining the first three wave move at 1.2874 and a double zigzag beginning from 1.2874. If so, that might mean price action is in the C wave of the second zigzag and there could be additional moves up. Regardless, though, it is difficult to make the case that the move up from 1.1876 is impulsive. I am not enamored of Elliott—the best counts occur so after the fact—but it is something to consider as an indicator of market psychology. <br />
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From a strict pattern point of view, the upward sloping rectangle constrains price action to between 1.3564 and 1.5368. The top line of the rectangle is a duplicate of the bottom line as to angle. In rectangles, price gets batted back and forth until there is a clear break out of the rectangle, i.e. one side becomes overwhelmed by the opposing side. Price fell short of the top line at 1.4942. Sometimes this hints at the breakout direction, in this case down.<br />
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Note on the weekly chart that RSI has dipped below its uptrend line. This happened in conjunction with price breaking an uptrend line drawn from January (the red dotted line on the chart). That line had a steep angle of ascent and was bound to break but if one extends that line, price tested it as resistance at 1.4647. If price closes beneath the uptrend line from 1.2874, that would be bearish and would make the longer term uptrend line vulnerable for testing, just above 1.35. <br />
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Adding to this bearish picture is the fact that since the May high of 1.4942, there has been a lower low at 1.3970 and a lower high at 1.4697. In fact, regardless of trend lines, since July 2008, almost two years ago, there has been nothing but lower highs (1.5144 and 1.4942) and lower lows (1.2329 and 1.1876). That is a downtrend. While trends reverse, it hasn’t proven to reverse yet. The first clue would be taking out 1.5144.<br />
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On a more positive note, Euro is holding above support (the 45° trend lines) on both my daily and three-hour point and figure charts. That reinforces the price zone above 1.40 as support. If price breaks beneath 1.3970, look out below. That would also be near the 50% retracement of 1.6041/1.1876. <br />
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The weekly cloud chart shows Euro to be well above the cloud so that’s bullish for looking for buy opportunities on the daily (or shorter) basis. <br />
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Immediate resistance is 1.4428/50 (the daily, 50-SMA, the monthly pivot calculation, the .618 retracement of 1.6041/1.1876), 1.4512, 1.4683/97 and 1.4735 (.786 retracement of decline from 1.4942). Above 1.4735 would be very bullish.<br />
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Support is 1.4186/52, 1.4074, 1.3970/59/22/08 (prior low, 50% fib mentioned above, monthly 10-EMA, and 50% retracement of 1.2874/1.4942), 1.3831 (the 200 daily SMA), 1.3780/40, and 1.3675. <br />
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Here’s a weekly chart:<br />
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<div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhqgMUy5nBCkmydAZFJUGqzSCucT6K_sXLpNcZ507OoOMQJVAWT2P7RTmEyZujZ7jRN41ViUUVGiA6cr6TLUnnpJ08cgsNceM-NyyS4DnJhXT4Ev8VRvAy-Pz-2E8Ke-jk15ea-pD_M6tqB/s1600/20110617+EU+W.png" imageanchor="1" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"><img border="0" height="184px" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhqgMUy5nBCkmydAZFJUGqzSCucT6K_sXLpNcZ507OoOMQJVAWT2P7RTmEyZujZ7jRN41ViUUVGiA6cr6TLUnnpJ08cgsNceM-NyyS4DnJhXT4Ev8VRvAy-Pz-2E8Ke-jk15ea-pD_M6tqB/s400/20110617+EU+W.png" width="400px" /></a></div><br />
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© 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. <br />
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.Florida Forex Traderhttp://www.blogger.com/profile/14185457722643140364noreply@blogger.com0tag:blogger.com,1999:blog-4398676385688239123.post-46788518213445749442011-06-17T09:33:00.000-04:002011-06-17T09:33:37.879-04:00EURUSD—rallyEuro has rallied to 1.4299 in what appears to be an ABC correction on the hourly chart (Wave A is 1.4074 to 1.4222; wave B drops from there to 1.4128). This means C has the potential of 1.4219, 1.4276, and 1.4367 so price is just above the point where C would equal A. The 50% retracement of the move down from Tuesday's high of 1.4497 is 1.4286; .618 would be 1.4335. There is additional resistance up to 1.4445 and of course the prior high of 1.4497. The latter is key resistance—if that breaks then it negates many bearish signals.<br />
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Price has not met the bear flag target of 1.3994. What is troublesome is that if one examines RSI on the daily chart, it is maintaining itself above 34.92, the low of RSI in January. That needs to start dropping to support the idea that the bearish view is the correct one. Euro also managed to stay within support (the internal 45° line) on the daily and three-hour point and figure charts I maintain. <br />
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Nonetheless, the case is still there for being in a third wave down. Let's see what unfolds.<br />
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© 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. <br />
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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.Florida Forex Traderhttp://www.blogger.com/profile/14185457722643140364noreply@blogger.com0tag:blogger.com,1999:blog-4398676385688239123.post-63729226707897296742011-06-16T11:38:00.000-04:002011-06-16T11:38:24.325-04:00EURUSD—testing interim resistanceEuro is testing the uptrend line drawn on the daily chart from January with the high so far today of 1.4178. This resistance is reinforced by the fact that it’s a fib confluence zone—the .382 retracement of 12874/14942 is 1.4152 and the .50 retracement of 13429/14942 is 1.4186. <br />
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I’m of two minds about this type of resistance. If it keeps battering at it, Euro may break through. On the other hand, another rebuff could send it back to its downward slide. <br />
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If this is an ABC correction on the hourly time frame, potential C wave targets are 1.4178, 1.4217 and 1.4281. The first one supports the high as resistance so I may add a short position with a tight stop. One must keep the weekly support line in mind, however.<br />
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© 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. <br />
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.Florida Forex Traderhttp://www.blogger.com/profile/14185457722643140364noreply@blogger.com0tag:blogger.com,1999:blog-4398676385688239123.post-77559233690585317722011-06-16T09:19:00.000-04:002011-06-16T09:19:31.375-04:00EURUSD—at weekly uptrend lineThe Euro has continued down, touching 1.4074. This is near the lows of May 13 and May 16. The 100-daily SMA (currently 1.4159) failed to serve as support, something that occurred in both February and May. Price is sitting on an uptrend line on the weekly chart (drawn from January). A break of this would be significant and would confirm the break of the RSI trendline.<br />
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The bear flag target of 1.3994 is within sight.<br />
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It appears likely that, as I wrote on Monday, this is the third wave down with the move up from 1.1876 being a double zigzag correction. If so (and I’d be cautious here as the markets have shown a tendency to swing one way or another depending on the risk assessment de jour), then there is a lot further to go. The best strategy would be to sell weak rallies. There is still a chance this could be an ABC correction with this being the C leg. Additional targets if that is true are 1.4046 (C = .618 A), 1.3675 (C = A) and 1.3074 (C = 1.618 A). Paying attention to price and momentum behavior between 1.3994 and 1.4074 should offer clues as to where things go from here. If price gets below 1.3862, it destroys the bullish Elliott Wave count (see Monday’s analysis). <br />
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Resistance is at 1.4129 (the weekly 20 EMA), 1.4151/86, 1.4234/88, and 1.4320/50. <br />
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Here’s a weekly chart. <br />
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<div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiHHpJ-L4ev76DuChRE9Sl27_z-4Wt1Sj-VtAaGTYOJVGVqRSeC2-zzY4M3ueudSHeZcqjaOVROHUH22gMr-fP0VRfBcpiuPaT6Q3hnlOX7ZgdUxQllQVe-VAkzymlF8KrjY3A4ZGRCIR56/s1600/20110616+EU+W.png" imageanchor="1" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"><img border="0" height="188px" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiHHpJ-L4ev76DuChRE9Sl27_z-4Wt1Sj-VtAaGTYOJVGVqRSeC2-zzY4M3ueudSHeZcqjaOVROHUH22gMr-fP0VRfBcpiuPaT6Q3hnlOX7ZgdUxQllQVe-VAkzymlF8KrjY3A4ZGRCIR56/s400/20110616+EU+W.png" width="400px" /></a></div><br />
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© 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. <br />
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.Florida Forex Traderhttp://www.blogger.com/profile/14185457722643140364noreply@blogger.com0tag:blogger.com,1999:blog-4398676385688239123.post-50487486611368971052011-06-15T12:19:00.000-04:002011-06-15T12:19:26.641-04:00EURUSD—new lowEuro touched 1.4206 but in doing so formed a hammer on the 15-minute chart with positive divergence. I think it can get lower—at least to 1.4155 (the daily 100-SMA) and maybe 1.4096 but it is probably time to take some profits. I have two short positions—one from 1.4581 and one from 1.4447. <br />
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© 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. <br />
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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.Florida Forex Traderhttp://www.blogger.com/profile/14185457722643140364noreply@blogger.com2tag:blogger.com,1999:blog-4398676385688239123.post-13617459523073398602011-06-15T11:14:00.000-04:002011-06-15T11:14:14.950-04:00EURUSD—trying to baseEuro has dropped to a low of 1.4264. The bear flag target (see yesterday's blog post) is 1.3994 so obviously it has a way to go. However, it may be trying to base for a recovery.<br />
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The hourly candle's low that completed at 9 AM was 1.4264; the one that completed at 10 AM was 1.4265; and the one that just completed at 11 AM was 1.4272. Yesterday, I wrote that 1.4288 was support. If the basing attempt fails, the next support level is 1.4236, 1.4186/51 (50% of the move from 1.3429 to 1.4942 and the daily 100-SMA and near .382 of 1.2874/1.4942). After that is 1.4096 (C wave target if .618 of A (see Monday's analysis), and 1.40 (psychological). <br />
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If it consolidates before additional downward price movement, expect it to reach a high of 1.4347/53 or 1.4378/90 before turning down again. Above that should find resistance at 1.4444. I would be highly suspicious of additional downward moves if it regained that much. However, there have been a lot of back and forth in the markets as uncertainty continues to cast its shadow. <br />
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© 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. <br />
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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.Florida Forex Traderhttp://www.blogger.com/profile/14185457722643140364noreply@blogger.com0tag:blogger.com,1999:blog-4398676385688239123.post-28012652293844665712011-06-14T08:23:00.000-04:002011-06-14T08:23:10.722-04:00EURUSD—bear flagOn the four-hour chart, Euro may be forming a bear flag. This pair loves to stair-step its way down so this would be in line with past price behavior. The .382 retracement of 1.4697/1.4288 was 1.4444. Price reached 1.4472 in the hour ending 7 AM EDT and for the hour just ended (8 AM), the high was 1.4468. The weekly pivot calculation is 1.4455. I would not rule out a move to 1.4493—the 50% retracement—or 1.4541, the .618 retracement. The latter is just above 1.4538, the .382 retracement of 1.4942/1.4288. Regardless, the zone between 1.4444 and 1.4555 is strong resistance. <br />
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Should the stinker—sorry, Euro—get above there, it means the pair would have regained the broken short-term trend line. After that, 1.4697 should cap prices. If it does not do so, there is little resistance to the high of 1.4942. <br />
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Support is 1.4406/4378 (.382 of recent move up, confluence, near flag breakout point, polarity), 1.4348, 1.4288, 1.4186/51 (50% of the move from 1.3429 to 1.4942 and the daily 100-SMA and near .382 of 1.2874/1.4942), 1.4096 (C wave target if .618 of A—see yesterday's analysis), and 1.40 (psychological). The bear flag target is 1.3994.<br />
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I'm leaning bearish, obviously, as I added another short position. However, closing prices on both my daily and three-hour point and & figure charts, show potential breakouts to the upside. I would take them seriously if they occur. <br />
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Here's the four-hour chart:<br />
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<div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiEizBl2KnXpGhMwsyJRIA0HhZ3g8uFhYT4nnuGY3-__4NQ3sNPtWabzrYAGDfdVbhqP6vhygxXn4EgHUlcLxPBcFCmhcfx9r_mLc5lDGeavcg4DU5G6KBsHjvXchFKl1TDZ955pYthsbsX/s1600/20110614+EU+4H.png" imageanchor="1" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"><img border="0" height="237px" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiEizBl2KnXpGhMwsyJRIA0HhZ3g8uFhYT4nnuGY3-__4NQ3sNPtWabzrYAGDfdVbhqP6vhygxXn4EgHUlcLxPBcFCmhcfx9r_mLc5lDGeavcg4DU5G6KBsHjvXchFKl1TDZ955pYthsbsX/s400/20110614+EU+4H.png" width="400px" /></a></div><br />
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© 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. <br />
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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.Florida Forex Traderhttp://www.blogger.com/profile/14185457722643140364noreply@blogger.com0tag:blogger.com,1999:blog-4398676385688239123.post-17727851302249696242011-06-13T11:19:00.000-04:002011-06-13T11:19:05.805-04:00EURUSD—daily chartOn the daily chart, one way to interpret the action from 1.1876 is from a bullish point of view as Euro makes its way up an upward sloping rectangle. The wave action would be:<br />
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Wave 1: 1.1876 to 1.2467 (591)<br />
Wave 2: 1.2467 to 1.2152 (315)<br />
Wave 3: 1.2152 to 1.3335 (1,183)<br />
Wave 4: 1.3335 to 1.2588 ((747)<br />
Wave 5: 1.2588 to either 1.4159 (1,571 pips) at which point began an ABC correction or to 1.4274 (1,686 pips) which then initiated a correction down to 1.2874. <br />
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That meets the three inviolate rules of an impulsive wave—wave three is not the shortest wave; wave four does not poke into wave one's territory, and wave two doesn't retrace more than wave one. The purpose of an impulsive wave is to make forward progress and price did do so. The action from 1.2784, though, is less clear. Bulls might say that would be the beginning of wave three. However, if it was then:<br />
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Wave 1: 1.2874 to 1.3862 (988)<br />
Wave 2: 1.3862 to 1.3429 (433)<br />
Wave 3: 1.3429 to 1.4942 (1,513)<br />
Wave 4: Either it completed at 1.3970 or it is still in process. If it is still in process, then B topped at 1.4697 and C can go no lower than 1.3862 (because wave four cannot enter into wave one territory). In a zigzag, wave C is usually .618A, equal to A, or 1.618A . If it is .618 of A then that price is 1.4096. To equal A, the price would have to drop lower than 1.3862 which should not happen to preserve the Elliott count. <br />
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Euro touched a low of 1.4288 and now seems to be struggling to recover from there. If one examines a cloud chart (which I try to do as little as possible but as they become more popular it's worth glancing at them), Euro has descended down to the bottom of the cloud. However, since it entered from above, this is still bullish and supports the ABC correction theory. <br />
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However, there is another way to examine the price action from 1.1876 and that is as a large correction, made up of a double zigzag. I have marked the letters for this correction, a double zigzag, on the daily chart below and this fits in with weekly price action as well which is a big plus in my mind. If this is true, then there is a big drop ahead as we'd be in a third wave. <br />
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This just goes to show how loopy Elliott Wave can be if you attempt to use it as a trading tool. However, it can be evidence and it can indicate market psychology. The nice thing about either of these interpretations is that unless the 4th wave discussed above is complete, the most likely scenario is for additional moves down under either interpretation. <br />
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Looking at possible support, regardless of Elliott, when the price dipped to 1.3970, the 100-daily SMA held as support. Currently, the 100 is at 1.4143. That is very close to 50% of the move from 1.3429 to 1.4942 (1.4186) and .382 of the move from 1.2874 to 1.4942. <br />
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For resistance, the high today is 1.4404, just completed on the hourly chart. That was just above confluence but it was also a doji. Above that is 1.4450 and 1.4500. At that point, price would have regained the broken, short-term, hourly uptrend line. <br />
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Here's the daily chart:<br />
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<div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjOBt7ljBJYOj5zKCtQ6dTMVV9j0OiHWOKW_9PG4EYcmKtyQYbKB4akoQkQc58MgfnL-JkK-5H8KrkRfviXUKqNwp_wFKMeBiveuhoMS1BpSj77QOyZMOHHky96-BwlKC3Uk3rw7FPZUJ3l/s1600/20110613+EU+D.png" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="176px" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjOBt7ljBJYOj5zKCtQ6dTMVV9j0OiHWOKW_9PG4EYcmKtyQYbKB4akoQkQc58MgfnL-JkK-5H8KrkRfviXUKqNwp_wFKMeBiveuhoMS1BpSj77QOyZMOHHky96-BwlKC3Uk3rw7FPZUJ3l/s320/20110613+EU+D.png" t8="true" width="320px" /></a></div>© 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. <br />
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<br />
<br />
<br />
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.Florida Forex Traderhttp://www.blogger.com/profile/14185457722643140364noreply@blogger.com2