EURUSD—new lows

Euro has dropped to a low of 1.2691 this morning (so far) and it's not at all clear that the story is yet over. It easily achieved the first price targets I had at .2728/23 and now looks as though it may be headed to the next one at 1.2660. Beyond that is a potential dip to 1.25 which would certainly get the attention of just about everybody. There will be a rally at some point. The question is where. While it looks as though it is hesitating here, it's not certain this is going to be a rally.

I just took additional profits from my short from 1.3034 for +311 pips. I added another short yesterday at 1.2876 and of course this one is solidly in profit as well.

There is positive divergence on the daily and one-hour chart but not on the three-hour chart. If a rally takes place, resistance will be at 1.2755, 1.2801, 1.2857, 1.2905, and 1.3050 (I think we can safely say we won't see that today). Support is at 1. 2660, 1.2600 and 1.2456.

The 3-hour chart doesn't have many outstanding features (except the down, down, down). However, there are upper shadows on the last two completed candles and a possible (and unlikely) expanding diagonal. Here's the 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.