My long position from 134.44 profit stopped out at 136.30 for +186 pips. The one from 135.90 profit stopped out at 136.20 for +30 pips. I then entered a short position at 136.10. I just took partial profits on that at +161 pips.
Apparently, resistance at 137.38 was just too tough. It's the third time it failed at that price. 137.91 is 50% of the move down from Feb. 17 so if it can't make that, it's weak indeed.
However, on the hourly chart one can see that it touched the .618 retracement (134.25) of the most recent move up and has continued down below it. The pair has also moved into an oversold reading for RSI. On shorter time frames (5-, 15-, and 30-munute charts) there's some bullish divergence so I'd expect at least a little bounce, perhaps back to the short-term uptrend line. 134.00 is also a strong support so I wouldn't add to shorts here. If it bounces back up through resistance at 135, it might be a stop and reverse situation. Price action should tell.
This area was resistance on Friday so it should serve as support. Next support is 134.00, 133.62, and 132.58. Resistance is at 134.33/43, 134.69, 135.39, 136.37 and 137.38. If it could make it through that then 138.64 and 139.59 are possible.
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.
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