EURUSD—weekly

The most prominent feature to me on the weekly chart is the bear flag. However that doesn't mean the Euro will tumble immediately but if it should drop below the bear flag and have a definitive close (hopefully not in the illiquid days of August) then there could be a quite significant price drop.

As of now it's trying to use the drop to 1.2734 as a base. This was somewhat below both the .382 retracement of the move up to 1.3335 (1.2771) and the 100 Daily SMA of 1.2792. 1.2734 was the result of a five-wave move down from the high on the three-hour chart. Price is now above both those levels. The next serious resistance is 1.2871, 1.2926/45, 1.3000 (psychological) and 1.3100. As to support, it's 1.2790, 1.2734, 1.2712, 1.2683/75, 1.2620 and 1.2523.

My plan is to short rallies. However caution is needed because of the lack of liquidity.

Here's the weekly 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.