Friday, February 26, 2010
Finished for February
OK, I'm done trading for the month. Still have long positions in EURGBP and USDCAD and am short in GBPJPY and EURUSD. It's been a good month with lots of opportunities.
GBPUSD—still weak
Despite its little rally where it went to a high of 1.5323 (not quite reaching my 1.5345 entry point), this pair is weak and looks as though it may resume its drop. I may try to short if it reaches its short-term uptrend line it just dropped through, around 1.5250.
1.5299 was the 50% Fibo level of the 2009 rise and the break yesterday was significant. It didn't get very far above that before turning down again.
Support is 1.5242, 1.5189, 1.5127 and 1.5036. Below the psychological 1.50, you could see 1.4763, the long-term daily uptrend line. Resistance is 1.5272, 1.5323, 1.5348, and 1.5430
Here's the three-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.
1.5299 was the 50% Fibo level of the 2009 rise and the break yesterday was significant. It didn't get very far above that before turning down again.
Support is 1.5242, 1.5189, 1.5127 and 1.5036. Below the psychological 1.50, you could see 1.4763, the long-term daily uptrend line. Resistance is 1.5272, 1.5323, 1.5348, and 1.5430
Here's the three-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.
EURUSD—resistance at 1.3628
The pair touched 1.3628 this morning, the same top it found on 2/24. It's fallen away from that price rather sharply and may reach 1.3541 before rallying again. The broadening pattern on the hourly chart may not be complete but broadening patterns at tops tend to be deadly. So far this one isn't disappointing but I'll move my stop as quickly as I can since Euro bulls have taken hope in their little rally.
The short I had from yesterday at 1.3571 profit stopped out in the rally at 1.3504 for + 67 pips.
Support is 1.3528/31, 1.3452, 1.3444, 1.3361, 1.3247, and 1.3000. Resistance is at 1.3628/40, 1.3692, 1.3706 and 1.3765.
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.
The short I had from yesterday at 1.3571 profit stopped out in the rally at 1.3504 for + 67 pips.
Support is 1.3528/31, 1.3452, 1.3444, 1.3361, 1.3247, and 1.3000. Resistance is at 1.3628/40, 1.3692, 1.3706 and 1.3765.
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.
EURGBP—can it keep climbing?
I have two positions open. One is from .8760 and on which I just took partial profits for +146 pips. The other is from .8883 which was a breakout buy after the pair broke through its tough resistance yesterday in the .8850 range. The stop is at breakeven on that trade. When the pair broke past .8865 yesterday, it blew past the .618 retracement of the most recent decline from the January .9028 high.
The pair has reached a high of .8921 this morning. Now it has to break through the psychological .9000. If it can do this, I have targets up to .9180 and it's possible it could reach to .9220.
Support is at .8902, .8862/50, .8833 and .8751. Further down are .8690, .8665, and .8603. Resistance is at .8988, .9000, .9028, .9053, .9124, and .9220
Notice the last completed candle on the three-hour chart—it encompasses four (and almost the fifth) of the prior candles. The bearish divergence is also troubling.
© 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.
The pair has reached a high of .8921 this morning. Now it has to break through the psychological .9000. If it can do this, I have targets up to .9180 and it's possible it could reach to .9220.
Support is at .8902, .8862/50, .8833 and .8751. Further down are .8690, .8665, and .8603. Resistance is at .8988, .9000, .9028, .9053, .9124, and .9220
Notice the last completed candle on the three-hour chart—it encompasses four (and almost the fifth) of the prior candles. The bearish divergence is also troubling.
© 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.
Thursday, February 25, 2010
GBPUSD—broke 50% support
This pair never got above Tuesday's high of 1.5576 so that was the bounce off the 1.5348 low. It's now down to a low of 1.5245 after trying to hammer out a low at 1.5272. It may climb back to 1.5272 which would be a nice shorting point. 1.5345 would be even better. 1.5299 was the 50% Fibo level of the 2009 rise and a break of that is significant.
Support is at 1.5127 and 1.5036. Below the psychological 1.50, you could see 1.4763, the long=term daily uptrend line.
Resistance:
1.5272/99
1.5345/48
1.5430
Here's the three-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.
Support is at 1.5127 and 1.5036. Below the psychological 1.50, you could see 1.4763, the long=term daily uptrend line.
Resistance:
1.5272/99
1.5345/48
1.5430
Here's the three-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.
USDCAD—back to resistance
I did get another chance to add a long position yesterday at 1.0534 so now I have two longs with the original from 1.0444.
The pair climbed from there but is now back at resistance with a high of 1.0609 today compared to 1.0594 yesterday. Will it make it through this time? The 1.0600/12 area is tough resistance. There may be a pullback to 1.0510 before it successfully breaks through.
Resistance
1.0600/12
1.0708
1.0766/81
1.0848
Support
1.0510/25
1.0439
1.0413
1.0375/88
1.0250
1.0225/08
Here's the three-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.
The pair climbed from there but is now back at resistance with a high of 1.0609 today compared to 1.0594 yesterday. Will it make it through this time? The 1.0600/12 area is tough resistance. There may be a pullback to 1.0510 before it successfully breaks through.
Resistance
1.0600/12
1.0708
1.0766/81
1.0848
Support
1.0510/25
1.0439
1.0413
1.0375/88
1.0250
1.0225/08
Here's the three-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.
EURUSD—weak
My original short from .13659 profit-stopped out at 1.3619 yesterday for +40 pips. Another case of the market then immediately reversing but that's OK. It's the name of the game sometimes and says more about my being slightly off on my calculations than anything else. I also shorted again yesterday at 1.3571 and that trade is intact and profit-stopped.
I'd like to take another short position but it's a matter of finding the entry. The pair reached a low of 1.3452 which is very close to the prior low of 1.3444. It has since rallied a bit, reaching a high of 1.3517 this morning and possibly heading to 1.3548. If it gets there that's my short entry. Otherwise, I may need to wait for a break of the current short-term trend line on the hourly chart or 1.3444. Price action will let me know.
Support is 1.3452, 1.3444, 1.3361, 1.3247, and 1.3000. Resistance is at 1.3517, 1.3548, 1.3572, 1.3692, and 1.3706.
Here's the hourly 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.
I'd like to take another short position but it's a matter of finding the entry. The pair reached a low of 1.3452 which is very close to the prior low of 1.3444. It has since rallied a bit, reaching a high of 1.3517 this morning and possibly heading to 1.3548. If it gets there that's my short entry. Otherwise, I may need to wait for a break of the current short-term trend line on the hourly chart or 1.3444. Price action will let me know.
Support is 1.3452, 1.3444, 1.3361, 1.3247, and 1.3000. Resistance is at 1.3517, 1.3548, 1.3572, 1.3692, and 1.3706.
Here's the hourly 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.
AUDUSD—gearing up for new lows?
I'm out of both of yesterday's trades at +57 and +55 pips respectively, having hit their erroneously set profit-targets (in other words, I was moving too quickly when I placed the trades and didn't reset my default profit target field). No harm—you can't go broke taking profits as they say but now I have the issue of having to get back in if I believe the pair is headed lower. It reached a low of .8858 in yesterday's trading so a break of that might be a good point and it would be just below the doji hammer that formed on the one-hour chart. Otherwise, I can see if the current rally is going to have any legs and try for a short at some point. Regardless, I think there's downward pressure on this pair and shorting is the way to go.
Resistance is at .9048, .9071, and .9093 but I think those numbers are unlikely today. Support is at .8858, .8785, .8722, .8578, and of course the unlikely .7216 (a long-term uptrend line on the daily chart).
Here's the three-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.
Resistance is at .9048, .9071, and .9093 but I think those numbers are unlikely today. Support is at .8858, .8785, .8722, .8578, and of course the unlikely .7216 (a long-term uptrend line on the daily chart).
Here's the three-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.
EURGBP—near tough resistance
This pair has continued to climb but is now at formidable resistance. I closed my first position from .8699 at +123 pips. I still have my second long position from .8760 which is obviously profit stopped.
Resistance is coming in from previous highs (.8833 on 1/17; .8842 on 2/11; and .8836 on 2/23). There are two schools of thoughts about a pair repeatedly coming up on previous resistance (or support). One thought says it will usually fail again and traders go short. The other sid, most notably written about by Gann, says it will eventually break through. Obviously, those traders go long on a breakout. However, there are other considerations besides just the strong price resistance. A downtrend line from October is coming in at .8846 and the pair is in an overall downtrend. Polarity is also at the .8845/.50 price level. There's negative divergence with RSI on the three-hour chart below. The pound's sorry state is probably what has kept this pair going up the last couple of days but I'm not sure that's going to continue.
Support is at .8751, .8690, .8665, and .8603. Resistance is at .8850, .9028, .9053, and .9124.
Here's the three-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.
Resistance is coming in from previous highs (.8833 on 1/17; .8842 on 2/11; and .8836 on 2/23). There are two schools of thoughts about a pair repeatedly coming up on previous resistance (or support). One thought says it will usually fail again and traders go short. The other sid, most notably written about by Gann, says it will eventually break through. Obviously, those traders go long on a breakout. However, there are other considerations besides just the strong price resistance. A downtrend line from October is coming in at .8846 and the pair is in an overall downtrend. Polarity is also at the .8845/.50 price level. There's negative divergence with RSI on the three-hour chart below. The pound's sorry state is probably what has kept this pair going up the last couple of days but I'm not sure that's going to continue.
Support is at .8751, .8690, .8665, and .8603. Resistance is at .8850, .9028, .9053, and .9124.
Here's the three-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.
Wednesday, February 24, 2010
EURGBP—didn't break support (yet)
Support held for this pair yesterday with a low of .8751, missing my stop from my long position (from .8699) by one pip. I added another long position at .8760 and have moved the stop on that one to breakeven. The rally, so far today, has reached the 50% retracement of the move down from yesterday's high with a high today of .8794. It has fallen off a bit from there and may yet break support. If it does break the .8742/50 price barrier, I will most likely go short.
Support is at .8750, .8684, .8642/58, and .8603. Resistance is at .8836/42, .8872/99, and .9028.
Here's the three-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.
Support is at .8750, .8684, .8642/58, and .8603. Resistance is at .8836/42, .8872/99, and .9028.
Here's the three-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.
AUDUSD—weak but feisty
After poking its pointy little head back above .9000 yesterday (the high was .9071 and no doubt it was trying to reach back inside its upward channel that showed on the three-hour chart I posted on Friday), AUDUSD proceeded to tumble down, moving to a low of .8879. I closed a short yesterday (not blogged about so I won't count it in profits) but the pair looks weak today as well so I've shorted again at .8919 and .8917. It reached up to .8937 overnight so that lets me get in with a tight stop.
There's good support in the .8879 area but if it can drop through there then it should move at least to .8800 and perhaps further. However, as I wrote last Friday, you have to be careful with this pair. Yesterday's high was higher than last week's high of .9036. The bulls will fight hard to keep this pair afloat and there is bullish divergence on the hourly chart along with some healthy looking candles. So, as is usual in trading, there is risk. The risk is the amount of your stop so that's why tight stops are good.
Support is at .8879, .8814/47, .8785, and .8518. Resistance is obviously the .8937 and then .9000, .9036, .9071, and .9100. But it it reached .9100 today, I'll eat a jar of Vegemite. (Only kidding, guys—while the Australians eat it with everything, it's too much for my delicate NorAm sensibilities). 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.
There's good support in the .8879 area but if it can drop through there then it should move at least to .8800 and perhaps further. However, as I wrote last Friday, you have to be careful with this pair. Yesterday's high was higher than last week's high of .9036. The bulls will fight hard to keep this pair afloat and there is bullish divergence on the hourly chart along with some healthy looking candles. So, as is usual in trading, there is risk. The risk is the amount of your stop so that's why tight stops are good.
Support is at .8879, .8814/47, .8785, and .8518. Resistance is obviously the .8937 and then .9000, .9036, .9071, and .9100. But it it reached .9100 today, I'll eat a jar of Vegemite. (Only kidding, guys—while the Australians eat it with everything, it's too much for my delicate NorAm sensibilities). 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.
EURUSD—bouncing
Euro is trying to recover and in doing so took out two of my three positions. Yesterday I said they were from 1.3659 and 1.3568. That was incorrect. The original one is from 1.3659 and those two were from 1.3568 and 1.3570. In any case, they're out at +13 and +12 pips respectively. The original is still intact.
On the three-hour chart you can see Euro forming another one of its "stair steps" as it has been doing all along in its tumble from its November high. If it gets back to the top of this one that means 1.3708. However, there's nothing impulsive about its up moves—they all continue to look corrective and this pair will more than likely sink lower. There's a long-term cycle playing out here, too, if you're into cycles. I'm not sure I am but enough people are that it bears looking at them.
Support is 1.3497, 1.3444, 1.3361, 1.3247 and 1.3000. Resistance is at 1.3572, 1.3692, 1.3706, 1.3750/88 and 1.39. Doubtful we'll see anything close to 1.39 but you never know. There's bullish divergence on the three-hour chart below:
© 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.
On the three-hour chart you can see Euro forming another one of its "stair steps" as it has been doing all along in its tumble from its November high. If it gets back to the top of this one that means 1.3708. However, there's nothing impulsive about its up moves—they all continue to look corrective and this pair will more than likely sink lower. There's a long-term cycle playing out here, too, if you're into cycles. I'm not sure I am but enough people are that it bears looking at them.
Support is 1.3497, 1.3444, 1.3361, 1.3247 and 1.3000. Resistance is at 1.3572, 1.3692, 1.3706, 1.3750/88 and 1.39. Doubtful we'll see anything close to 1.39 but you never know. There's bullish divergence on the three-hour chart below:
© 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.
USDCAD—stalling again
My last post on this pair yesterday afternoon said I'd add to my long position if it dropped to 1.0520/30. It did do that as I expected but alas, I'm not awake at 1 or 2 in the morning EST and I missed it. So I only have my one long position from 1.0444.
In any case, the pair is still fighting resistance. On the hourly chart, it doesn't look great with the bearish evening star candle formation, forming at resistance. This is the same formation that spelled trouble for the pair last Thursday. I've circled both on the one-hour chart. The close of the current one-hour bar (it just closed at 7:00 AM EST) negates it somewhat since it's a bullish candle but it shows there is a lot of resistance here. I'm also keeping an eye on the three-hour chart. If there's a failure swing, the outlook will dim that this pair can get through the tough1.0580/1.0600 resistance. However, above 1.0520, the uptrend should continue.
Resistance
1.0600
1.0636/44
1.0775
1.0848
Support
1.0520/30
1.0439
1.0413
1.0372/82
1.0250
1.0225/08
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.
In any case, the pair is still fighting resistance. On the hourly chart, it doesn't look great with the bearish evening star candle formation, forming at resistance. This is the same formation that spelled trouble for the pair last Thursday. I've circled both on the one-hour chart. The close of the current one-hour bar (it just closed at 7:00 AM EST) negates it somewhat since it's a bullish candle but it shows there is a lot of resistance here. I'm also keeping an eye on the three-hour chart. If there's a failure swing, the outlook will dim that this pair can get through the tough1.0580/1.0600 resistance. However, above 1.0520, the uptrend should continue.
Resistance
1.0600
1.0636/44
1.0775
1.0848
Support
1.0520/30
1.0439
1.0413
1.0372/82
1.0250
1.0225/08
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.
Tuesday, February 23, 2010
USDCAD—finally!
OK, it looks as though this rascal finally decided to move. As of 2:35 PM, its high is 1.0580 where it's running into some headwinds. I'm hoping to add to my position if it drops back to 1.0520/30 which I believe it will before it tries to move through 1.0600. I took partial profits at +125 pips. 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.
© 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.
EURGBP—possible short
I went long in this pair several days ago and am obviously in profit but the pair has failed to break through resistance at .8836/42 and may be heading back to its short-term uptrend line. Support is at .8742/56 so a clear break of that could make for a nice short. I'll be profit stopped out at .8750 so I may reverse. Support is at .8683 (the uptrend line) where I'd try another long.
Here's the three-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.
Here's the three-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.
USDCAD—finding a direction?
I can make a good case for both selling and buying this pair in the short-term which is normally a prescription to stay out until there's a clearer direction. There's been nothing but chop-chop since Friday, most of it with a negative bias. I have one long position on from 1.0444.
The pair seemed to hammer out a base of sorts overnight in the 1.0372 area. It has since gone on to make a higher low at 1.0382 so perhaps it's headed up again. If one looks at the three-hour chart, one can see a broadening pattern. The top of that pattern is at 1.0600 and there is some formidable resistance before it gets there. If it can get past 1.0530, it may have a shot. Once out of that, the uptrend should resume. There's bullish divergence on the chart. However, price action will tell the story.
Resistance
1.0530
1.0600
1.0636/44
1.0775
Support
1.0439
1.0372/82
1.0250
1.0225/08
© 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.
The pair seemed to hammer out a base of sorts overnight in the 1.0372 area. It has since gone on to make a higher low at 1.0382 so perhaps it's headed up again. If one looks at the three-hour chart, one can see a broadening pattern. The top of that pattern is at 1.0600 and there is some formidable resistance before it gets there. If it can get past 1.0530, it may have a shot. Once out of that, the uptrend should resume. There's bullish divergence on the chart. However, price action will tell the story.
Resistance
1.0530
1.0600
1.0636/44
1.0775
Support
1.0439
1.0372/82
1.0250
1.0225/08
© 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.
GBPUSD—maybe it can't rally
I woke up early this morning and saw my trade from yesterday was nicely up, moved my stop to breakeven, and whammo! Out it goes in an overall drop that many of the pairs engaged in. This is not what I was expecting although the pair is weak overall.
I wrote yesterday about the weekly chart. I got ahead of myself when I wrote the weekly chart was showing a star. What I meant to write was that if the current week continues in this vein it would be a star that could lead to a morning star. It still could do that but of course one must wait for the week to conclude before it's definite. However, I'm still seeing the recent low of 1.5348 as iii in the wave count so I'd still expect a bounce. If that low is taken out then obviously I'm incorrect.
The pair broke its .382 retracement of the rise in 2009 when it fell through 1.5701 as well as that being a round number and 1.5708 being the October low. The 50% retracement is at 1.5276. If we don't get a bounce today then surely we'll get one when the pair approaches that price.
Today's high was 1.5576. It's possible it will still rally but if it does the first thing it needs to do is retake the short-term hourly uptrend line at 1.5478.
Support:
1.5348
1.5276
1.5036
Resistance:
1.5576
1.5675
1.5701
1.5779
1.5816
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.
I wrote yesterday about the weekly chart. I got ahead of myself when I wrote the weekly chart was showing a star. What I meant to write was that if the current week continues in this vein it would be a star that could lead to a morning star. It still could do that but of course one must wait for the week to conclude before it's definite. However, I'm still seeing the recent low of 1.5348 as iii in the wave count so I'd still expect a bounce. If that low is taken out then obviously I'm incorrect.
The pair broke its .382 retracement of the rise in 2009 when it fell through 1.5701 as well as that being a round number and 1.5708 being the October low. The 50% retracement is at 1.5276. If we don't get a bounce today then surely we'll get one when the pair approaches that price.
Today's high was 1.5576. It's possible it will still rally but if it does the first thing it needs to do is retake the short-term hourly uptrend line at 1.5478.
Support:
1.5348
1.5276
1.5036
Resistance:
1.5576
1.5675
1.5701
1.5779
1.5816
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.
EURUSD—up and down and round and round
The remainder of my old short from 1.3700 was taken out in the Euro's anemic little rise for +12 pips. I'm not really frothing at the mouth that Euro then turned and took a nosedive after taking it out—this happens. My last short from yesterday at 1.3594 was stopped out at 1.3637 for -43 pips.
I shorted again very early this morning at 1.3659 and I've already moved my stop to better than breakeven since the pair is in my favor 78 pips as of 6:10 AM EST. I am a little surprised that the Euro couldn't manage a slightly better rally. The overnight high was only 1.3692. Perhaps it still will do so. It did close above 1.36 yesterday. However, the three-hour chart looks rather glum with an evening star formation at the top and the pair dropping deep within the broadening formation I wrote about yesterday. Note, though, there's a short-term uptrend line coming in at 1.3545 and just below that is the bottom of the broadening pattern at 1.3540. In addition, if you draw an uptrend line from the March low on the daily chart to the recent lows, you come in at 1.3463. Get ready for a rumble if the pair gets near there.
Support:
1.3540/45
1.3500/24
1.3444/63***
1.3361
1.3247
1.3000
Resistance:
1.3692/3700
1.3750/88
1.3900
1.4017
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.
I shorted again very early this morning at 1.3659 and I've already moved my stop to better than breakeven since the pair is in my favor 78 pips as of 6:10 AM EST. I am a little surprised that the Euro couldn't manage a slightly better rally. The overnight high was only 1.3692. Perhaps it still will do so. It did close above 1.36 yesterday. However, the three-hour chart looks rather glum with an evening star formation at the top and the pair dropping deep within the broadening formation I wrote about yesterday. Note, though, there's a short-term uptrend line coming in at 1.3545 and just below that is the bottom of the broadening pattern at 1.3540. In addition, if you draw an uptrend line from the March low on the daily chart to the recent lows, you come in at 1.3463. Get ready for a rumble if the pair gets near there.
Support:
1.3540/45
1.3500/24
1.3444/63***
1.3361
1.3247
1.3000
Resistance:
1.3692/3700
1.3750/88
1.3900
1.4017
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.
Monday, February 22, 2010
EURUSD—15-minute chart
Euro has basically thrashed around this morning. On the 5- and 15-minute chart, the pair was coiling inside a symmetrical triangle and has broken downward but was stopped by an uptrend line from this past Friday. This triangle formed coming out of a broadening formation, visible on the one-hour and 15-minute chart. It's possible these are only short-term bearish signals—one would still hope for a rally—but I've been shorting tiny rallies this morning, the last short being from 1.3594 which is still on. A definitive break of the uptrend line would target 1.3560 and then 1.3533 in the short-term. A break upward would bring back the idea that the pair was ready for a rally.
Here's the 15-minute 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.
Euro has basically thrashed around this morning. On the 5- and 15-minute chart, the pair was coiling inside a symmetrical triangle and has broken downward but was stopped by an uptrend line from this past Friday. This triangle formed coming out of a broadening formation, visible on the one-hour and 15-minute chart. It's possible these are only short-term bearish signals—one would still hope for a rally—but I've been shorting tiny rallies this morning, the last short being from 1.3594 which is still on. A definitive break of the uptrend line would target 1.3560 and then 1.3533 in the short-term. A break upward would bring back the idea that the pair was ready for a rally.
Here's the 15-minute 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.
USDCAD—weekly chart
How sweet! Just like on the weekly GBPUSD chart, there's a star for last week on this chart as well. Another pair where there's a stalemate between the bulls and the bears. These two pairs tend to move opposite of each other so if there's going to be a rally in the GBPUSD then USDCAD will probably decline.
On the weekly chart you can see the pair is in a channel but not quite near the bottom. Support is at 1.0238/98 where 1.0298 is the uptrend line coming in from the 2007 low and 1.0238 is the bottom of the channel. More immediate support is at 1.0370, the low so far today. I will probably look for long positions if it approaches those levels. Resistance is at 1.0400/07/21, 1.0498, 1.0530 and 1.0593/0600.
Here's the weekly chart:
On the weekly chart you can see the pair is in a channel but not quite near the bottom. Support is at 1.0238/98 where 1.0298 is the uptrend line coming in from the 2007 low and 1.0238 is the bottom of the channel. More immediate support is at 1.0370, the low so far today. I will probably look for long positions if it approaches those levels. Resistance is at 1.0400/07/21, 1.0498, 1.0530 and 1.0593/0600.
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.
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.
GBPUSD—weekly chart
My short position in this pair from 1.5871 profit-stopped out last week at 1.5771 (+100 pips). I had a sell order in at 1.5827 which narrowly missed being executed. I was busy with other pairs so I didn't track GBPUSD as closely as I could have. I was a little surprised this morning to see that, except for the weekly chart I posted last Monday, I haven't made a more detailed post about this pair since Feb. 10.
The weekly chart shows the pair in a clear downtrend—lower highs and lower lows—but also near the bottom of a broad channel. The weekly candle that just completed is a star. If this week closes well into the week before last then it will be a morning star and one could expect this pair to head up again. In general, stars represent a stalemate between the buyers and sellers and it's a warning of a trend reversal. The low last week was 1.5348, near the high of May, 2009. This could be expected to serve as support so the star formation could be more significant. In addition it could be wave iii of a third wave. It will be important to track price action this week but all of this points to a possible rally. I just took a small long position at 1.5494
Resistance:
1.5564
1.5675/5700
1.5775
1.5816
Support
1.5448
1.5400
1.5348/60
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.
The weekly chart shows the pair in a clear downtrend—lower highs and lower lows—but also near the bottom of a broad channel. The weekly candle that just completed is a star. If this week closes well into the week before last then it will be a morning star and one could expect this pair to head up again. In general, stars represent a stalemate between the buyers and sellers and it's a warning of a trend reversal. The low last week was 1.5348, near the high of May, 2009. This could be expected to serve as support so the star formation could be more significant. In addition it could be wave iii of a third wave. It will be important to track price action this week but all of this points to a possible rally. I just took a small long position at 1.5494
Resistance:
1.5564
1.5675/5700
1.5775
1.5816
Support
1.5448
1.5400
1.5348/60
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.
EURUSD—weekly chart
Here's the weekly chart for the Euro. One thing to notice is the great indecision about the pair as represented by the long upper and lower shadows on the most recent candles.
© 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.
© 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.
EURUSD—rally time?
Time to pull back a bit and look at where Euro has been. Back in early to mid-January, I wrote many times about the bear flag that was on the EURUSD daily chart e.g. http://forexreflections.blogspot.com/2010/01/eurusdbear-flag-on-daily.html
I wrote then that the target could be 1.34. This past Thursday, the pair reached 1.3444. Close enough, as they say. I've also been recently posting the three-hour chart that shows the nice stair steps down as it has reached this low.
There's a fair amount of bearish sentiment towards Eurozone and it wouldn't surprise anyone if the pair continues to drops. I've heard such targets as 1.25 tossed around and this doesn't seem unreasonable. I've also heard targets much lower, down to the 1.10 area which would certainly cause a flurry of news headlines. The real question for shorter-term traders is, what now, what about in the next week or so?
I've said it many times. No pair drops straight down and even this stair stepping dance the Euro has been engaged in is a pretty intense drop (see last Friday's 3-hour chart and the daily chart below). At some point, one usually sees the rotten-titled "dead cat bounce" (DCB) where there's a more significant rally in a pair. A DCB comes about because people are bottom-fishing (trying to guess where the bottom might be). It's further fueled by traders covering short positions. Often there's an event that sets off a last decline before the DCB kicks in (Greece's problems could qualify). The DCB's chances for real success—i.e. a sustained upward movement—are usually grim and the decline resumes after whatever rally takes place.
If there is a rally, how high could it go? If my Elliott Wave (EW) count is correct, then price cannot exceed 1.4217 because that would have been the bottom of wave one. That doesn't help much because the Euro is now offered at 1.3603 (as of 7:19AM EST). Other possibilities are 1.3788 (the Feb. 3 high and more than achievable) and 1.4017 (the Feb. 17 high). A final possibility from my "worst-case" calculations is 1.4145. If the Euro closes above 1.36 again today, none of these are out of the range of possibility. However, my best take on this is that if this is a DCB, the rally won't exceed 1.4004. The 1.40 resistance is going to be fierce because of the psychological impact of the round number and prior resistance.
That said, my trading strategy remains the same in this pair as it was last week and that is to sell rallies. I still have part of a short position from 1.3700—if that's taken out, I'll be looking to short anywhere from there on up to 1.4000. Resistance is at 1.3670, 1.3750/88, 1.3900, and 1.4017.
As to what could happen if this isn't a rally….well, let's not go there, right now. But support is at 1.3500/24, 1.3444, 1.3361, 1.3247 and 1.3000.
There's slight bullish divergence on the daily chart but Euro overall still looks weak. More later on this pair. Here's the daily 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.
I wrote then that the target could be 1.34. This past Thursday, the pair reached 1.3444. Close enough, as they say. I've also been recently posting the three-hour chart that shows the nice stair steps down as it has reached this low.
There's a fair amount of bearish sentiment towards Eurozone and it wouldn't surprise anyone if the pair continues to drops. I've heard such targets as 1.25 tossed around and this doesn't seem unreasonable. I've also heard targets much lower, down to the 1.10 area which would certainly cause a flurry of news headlines. The real question for shorter-term traders is, what now, what about in the next week or so?
I've said it many times. No pair drops straight down and even this stair stepping dance the Euro has been engaged in is a pretty intense drop (see last Friday's 3-hour chart and the daily chart below). At some point, one usually sees the rotten-titled "dead cat bounce" (DCB) where there's a more significant rally in a pair. A DCB comes about because people are bottom-fishing (trying to guess where the bottom might be). It's further fueled by traders covering short positions. Often there's an event that sets off a last decline before the DCB kicks in (Greece's problems could qualify). The DCB's chances for real success—i.e. a sustained upward movement—are usually grim and the decline resumes after whatever rally takes place.
If there is a rally, how high could it go? If my Elliott Wave (EW) count is correct, then price cannot exceed 1.4217 because that would have been the bottom of wave one. That doesn't help much because the Euro is now offered at 1.3603 (as of 7:19AM EST). Other possibilities are 1.3788 (the Feb. 3 high and more than achievable) and 1.4017 (the Feb. 17 high). A final possibility from my "worst-case" calculations is 1.4145. If the Euro closes above 1.36 again today, none of these are out of the range of possibility. However, my best take on this is that if this is a DCB, the rally won't exceed 1.4004. The 1.40 resistance is going to be fierce because of the psychological impact of the round number and prior resistance.
That said, my trading strategy remains the same in this pair as it was last week and that is to sell rallies. I still have part of a short position from 1.3700—if that's taken out, I'll be looking to short anywhere from there on up to 1.4000. Resistance is at 1.3670, 1.3750/88, 1.3900, and 1.4017.
As to what could happen if this isn't a rally….well, let's not go there, right now. But support is at 1.3500/24, 1.3444, 1.3361, 1.3247 and 1.3000.
There's slight bullish divergence on the daily chart but Euro overall still looks weak. More later on this pair. Here's the daily 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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