EURGBP—the little engine that could?

This pair just doesn't want to give up. The high so far today is .9077 so it may make another run at .9150 where it will surely fall back in a dead faint. It's climbing on pound weakness but it's not exactly as though the Euro is strong. I was ready to short again yesterday but the pair didn't seem to fall to pieces when it touched .9065 so I waited for another candle and decided a tiny long was the better course of action so I bought at .9050.

I don't expect this pair could get much beyond .9150 so I'll be reducing my position size as it approaches that price unless things look really bullish. If I wasn't long I'd probably have tried a small short when it reach .9070 this morning. If it hits my stop I may reverse depending on price action.

While the pair has not met calculated price targets I'm a bit pessimistic about it. Notice the steep ascent of the most recent rise. Steep ascents are not usually sustainable and this one has dropped beneath it somewhat. It's also peeked into overbought readings on the RSI but a failure to get well into overbought would be negative. Keep an eye, too, if it breaks the upward RSI trend line. Caution is probably the best advice about this pair.

Support is at .9000, .8973, .8956, .8920, and .8867. Resistance is at ..9100/11, .9150, and .9200.

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.