EURUSD—up and down and round and round

The remainder of my old short from 1.3700 was taken out in the Euro's anemic little rise for +12 pips. I'm not really frothing at the mouth that Euro then turned and took a nosedive after taking it out—this happens. My last short from yesterday at 1.3594 was stopped out at 1.3637 for -43 pips.

I shorted again very early this morning at 1.3659 and I've already moved my stop to better than breakeven since the pair is in my favor 78 pips as of 6:10 AM EST. I am a little surprised that the Euro couldn't manage a slightly better rally. The overnight high was only 1.3692. Perhaps it still will do so. It did close above 1.36 yesterday. However, the three-hour chart looks rather glum with an evening star formation at the top and the pair dropping deep within the broadening formation I wrote about yesterday. Note, though, there's a short-term uptrend line coming in at 1.3545 and just below that is the bottom of the broadening pattern at 1.3540. In addition, if you draw an uptrend line from the March low on the daily chart to the recent lows, you come in at 1.3463. Get ready for a rumble if the pair gets near there.

Support:

1.3540/45
1.3500/24
1.3444/63***
1.3361
1.3247
1.3000

Resistance:

1.3692/3700
1.3750/88
1.3900
1.4017

Here's the one-hour chart:
























© Dianne Fecteau, 2010. 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.