Considering price behavior over the long term (from Nov. 2007), the trend is down. So while Cable could reach the 1.63 high again, it's not likely it will sustain it. It seems more likely that interim resistance in the 1.5650 to 1.5889 zone will prove to be the top. That's too big a range for short-term trading, I know, but it can be refined as price moves above 1.5650.
Potential downside moves will find support at 1.5485 (yesterday's low), 1.5349/45 (200 daily SMA and 50% of 1.6461 to 1.4228), and 1.5295/87 (Sept. 10th low and fib confluence). Longer term price action, given an Elliott Wave spin, suggests possible moves down below the prior 1.35 low. There will be several opportunities to short on that trip down if, in fact, it should occur.
Here's the monthly 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.
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