Friday, May 7, 2010

EURUSD—the stampede continues

I still have part of my short from 1.3034 in play. My short from 1.2876 profit-stopped out at 1.2785 for +91 pips (where it then of course turned right back down but that's the breaks). I have entered another short at 1.2708 which is in profit.

The low yesterday was 1.2516 and it looks as though it may be headed back there in some sort of kneejerk, the sky is ending, Eurozone is falling apart, type of scenario. Support is at 1.2605, 1.2516, 1.2460, 1.2425, and 1.2390. Look for resistance at 1.2798, 1.2857, 1.2905 and 1.2996.

Here's a 3-hour chart that shows the stampede:












© 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—correcting

In what looks like a corrective move USDCAD has dropped back from its spike high of 1.0745 yesterday to a low of 1.0338 today (so far). The pair should find some support in this area but RSI, representing momentum, is faltering. Next support is at 1.0282, 1.0174 and 1.0089 (the uptrend line). Resistance is at 1.0356, 1.0571, 1.0681, and 1.0745.

Yesterday I took some profits on my long from 1.0135 at +297 pips. I still have a small position left from that trade. My long from 1.0190 profit stopped out at +199 pips. Canadian unemployment news was good this morning and the US Non-farm payroll is coming out in the next few minutes so this pair may see further movement.

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.

GBPUSD—volatile

The remainder of my long stopped at breakeven yesterday.

Since last night the pair has been swinging wildly from 1.4764 down to a low of 1.4476 and back up recently to 1.4724. One of the explanations I read for the move back up this morning was, the writer contended, because of Moody's pronouncement that "UK election outcome no direct threat to UK AAA credit rating." As if. What was their explanation for the move down, I wonder. No doubt the UK election outcome. The pair is swinging because of uncertainty, because of moves that went too far, too fast, because of kneejerk reactions, because it is. Save the tired explanations.

The 1.4720 price area is a fibonacci confluence zone so if it can make it through there then further gains might be possible. There is some positive divergence on the hourly chart but divergence has been common recently. Additional resistance is at 1.4747/64, 1.4868, 1.4929 and 1.4994. If it falters then shorting is the way to go. Support is at 1.4661,1.4597, 1.4476 and 1.4397. I shorted at 1.4680.

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.

Thursday, May 6, 2010

GBPUSD—election jitters

Mostly markets look ahead, discounting news so that by the time the average person becomes aware of anything happening, the market is moving on. In the case of the pound, though, it looks as if the market is jittery, completely unsure of the outcome. GBPUSD has dropped lower hitting 1.4844 and in doing so nudged below its long term uptrend line from early '09. It looks like over reaction to me.

I went long at 1.4875 but I've already taken some profits at +30 pips and moved my stop to breakeven. I wouldn't be surprised to see more reaction, make that kneejerk reaction.

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.

EURUSD—probing lower

Big question right now is whether the Euro will break below 1.2691 since it's testing that level again. I added another short at 1.2742 but I'm going to close it if price starts back up. On the hourly chart below you can see the positive divergence. Also, on the hourly chart one can see an ending diagonal.












© 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—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.

USD Index—Weekly and Daily

The USD index has been in an uptrend since November. Longer than that, actually, since it has been in an uptrend since 2007. The weekly chart below shows the uptrend line from the low of Mar '08 to today's high of 84.31. It also shows the downtrend line coming in from the high of .9253 in 2005.

One hypothesis is that the USD is climbing towards that downtrend line. There it will be gobsmacked (just as it was in Mar '09) and begin to drop towards the uptrend line. That's a simple approach. Before you fall over laughing, remember Occam's Razor. Simple is good. This interpretation would mean the index could reach a high of 88.70 before falling in any serious way. Here's the weekly chart:

Then, of course, we could bring in an Elliott Wave count. If one assumes wave 1 ended at 89.71 and wave 2 at 74.17, then we're in wave 3, which means it will head higher. This is a rough count with none of the nuances I spent an hour on last night but rough can be good too. This move up since Nov '09 has some of the characteristics of a third wave such as the RSI moving into overbought. Not in a straight line of course. Never in a straight line. Which brings us to how to trade the damn thing.

I don't think it would be unwise to expect a correcton. If you look at a daily chart and put an EW count on it, you run into the fact you're probably dealing with an impulsive wave that is not clear as to which wave is extending. As a result, one can number up to 9 before the impulse wave is complete. That interpretation, too, suggests that wave 8 will begin soon which would be corrective. The reason I'm moving away from labeling the daily as an ABC correction (which I did last week) is that the move up in the last few days invalidates this being a B wave. If you assume that A ended on 4/14 at 80.03 then A consisted of 3 waves—this means it was a triangle or a flat but not a zigzag since that has 5 waves. The high of today has been 84.31 (the same as yesterday) and has unfolded in 5 waves. The 5 waves preclude a flat which must be 3-3-5 and a triangle which must be 3-3-3-3-3. So we have no valid corrective wave count and still seem to be in an impulse. (This is all if you subscribe to EW theory which is less than proven but does seem to have some applicability in markets, although alas, only brilliantly in hindsight). I've put the daily below the weekly chart below.

The bottom line is that one could reasonably expect a correction to 81, the uptrend line on the daily chart. When? The simple answer is when risk aversion begins to lessen. This doesn't seem likely in the next hour or two anyway since there is so much concern over the Euro and with the general election in the UK. Perhaps after Mercury stops being retrograde on May 11th? Or when it approaches the next Gann Fan line? Both are as good as any other approach but neither has any real credibility since neither has ever been rigorously tested. Oh well. Back to watching price movement on the shorter-term charts. That tells you as much as anything and only requires discipline and awareness.

Here are the weekly and daily charts:










Daily:










© 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, May 5, 2010

USDCAD—faltering

The pair reached a high of 1.0356 before stumbling this morning. It has since dropped back to 1.0276. Since that was near prior resistance it's not a bad price but now the pair has to begin to rally again to maintain a bullish outlook. I have two shorts, one at 1.0135 and one at 1.0190. I've taken additional partial profits on the first one at +140 pips but depending on how the pair behaves over the next hour or so I may add a position. The price target from the symmetrical triangle is 1.0470.

Resistance is at 1.0356, 1.0541, 1.0470 and 1.0681. Support is at 1.0215, 1.0179 (the triangle breakout point), 1.0045, 1.0012 and .9931.

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—broke below 100 SMA

AUDUSD broke below its 100 daily SMA (currently at .9075) and seems headed for the 200 at .8959. In doing this it has broken uptrend lines, downtrend lines that it had broken above, and a speed line as well as the.9135 bottom of April's trading range. Looks like the indecision that has plagued this (and many) pairs has been resolved into a fearful stampede. The low this morning has reached .9021 where it looks as though it's trying to bounce. If it should bounce one might see .9190 but don't hold your breath. One could try a long with a very tight stop since it's below April's low but be careful if you do so and lock in profits or at least move to breakeven as quiicky as possible. There is some positive divergence on the shorter-term charts.

Resistance is .9088. .9130/50, .9190, .9214, .9300, and .9364. Support is at .9002, .8959, .8927 and .8842. (.8842 is the point where two speed lines come together from Nov high and 2008 lows).

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—way low

Well, well. Reversing was certainly the right thing to do yesterday. My short is from 1.3034 and I just took partial profits at +209 pips. With a low so far of 1.2804, it has blown through all the support levels I listed yesterday and, quite frankly, I'm a little stunned there hasn't been some sort of rally. It hasn't been this low since March 2009. Should the pair decide to rally, 1.2885 will be resistance, then 1.2907, and 1.3050. There is some positive divergence on the hourly and daily chart.

Support is at 1.2755, 1.2700, 1.2660, 1.2600 and 1.2456.

I do have calculated price targets down to 1.2728/23 and then to 1.2660. Beyond that it could dip to 1.25. When I calculated those back in February they seemed laughable but there you go.

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.

Tuesday, May 4, 2010

EURUSD—reversed

After the anemic rally and the drop back down to 1.3040, I reversed and went short. There's a lot of bearishness out there today.

USDCAD—update

I took partial profits at +100 pips on my long from 1.0135. I also opened another position at 1.0190 earlier and at which the stop is better than breakeven. The pair is hesitating around 1.0230, a bit higher than I thought it would find resistance at.

EURUSD—new lows

With the drop of the Euro to a new low this morning of 1.3060, it's very likely the bears will try to push it down to 1.30. The new low also negates the daily EW count I did last week and suggests that the Euro may finally be ready to drop to the projected 1.28/1.29 lows. 1.2885 is going to offer good support it it gets down there.

The question is, if you're not already short, can you get in to this move down. A look at the hourly chart, suggests it might find some support at 1.3040 and bounce a bit so one could short a rally from this level or short a break below this price. I took a small long position with a very tight stop at 1.3042. Believe me, I will be willing to stop and reverse. The hourly RSI is very oversold so it would seem reasonable to expext a bounce of some sort. There's also potitive divergence on the three-hour chart. If by chance it rallied back to the top of the range, 1.3320, one could happily short.

Support is 1.3040, 1.3000, 1.2885, and 1.2808. Resistance is at 1.3114, 1.3165, 1.3253, and 1.3320.

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—drop to range bottom

AUDUSD has dropped below its uptrend line from January. The pair is currently offered at .9157 so it's moving towards the bottom of the April trading range (.9135 to .9391). On the hourly chart, RSI has entered oversold readings. When it broke below its uptrend line, upper shadows started to appear on the hourly candles, hinting that it was rejecting higher prices for now. However there are lower shadows, too, which hint that lower prices are being rejected. Basically, it looks like the same-old, same-old—indecision.

.9130 is support so it requires watching price action carefully if it approaches that level. If that fails, the 100 daily SMA is at .9074 and that has proven to be support in the past. WIth these two layers of support, one could attempt a small buy as it moves lower (if it moves lower).

Unless it definitively breaks out of the April range, there is no clear trend evident in this pair so any interim trades must take this into account.

Resistance is at .9214, .9300, .9324, .9364, .9384, .9406, AND .9579 Support is at. 9150, .9074 (100 SMA), .9039, .9002, and .8927.

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.

USDCAD—coiling

Partly because of the monthly chart I posted yesterday and partly because of indecision on a dip on the shorter-term chart,, I went long the USDCAD at 1.0135 yesterday. So far the pair is up to a high of 1.0174 this morning. The pair is coiling inside a symmetrical triangle so it will find resistance at 1.0184. The last dip inside the coil stopped well short of the bottom of the triangle so that may be a hint that it will break upward.

Resistance is at 1.0184, 1.0215, 1.0304 and 1.0681. Support is at 1.0112, 1.0045, 1.0012 and .9931.

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.

Monday, May 3, 2010

USDCAD—monthly chart

One can make a case on the USDCAD monthly chart for a potential wave up from the .9931 low especially since April formed a hammer on the monthly chart and provided a touch for a trendline up from the '07 low. If I assume for a moment that this will be the start of wave three then I can project prices getting beyond the 1.3065 '09 high so a long position could prove very profitable. But how long it would take? Aye, that's the question and of course it wouldn't be a straight upward shot. Still, as a long-term trade the possibility exists, that is if you believe in Elliott wave theory.

Support on the shorter-term charts is relatively close by at 1.0112, 1.0012 and .9931. Resistance is at 1.0184, 1.0215, 1.0304 and 1.0681.

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.

AUDUSD—monthly chart

The monthly chart shows AUDUSD poking its nose above the downtrend line from July 2008 (2d touch was Nov. '09). The pair is in an uptrend from 2001 but this rise to July '08 (within the rectangle) looks corrective. However, this isn't the cleanest count. Certainly the rise from late '08 has been very steep and it's questionable whether it can maintain this angle. In April, there was a lot of back and forth within the range.9135 to .9391 so no clear trend is evident right now. If price clears .9406, the November high, perhaps the pair can find a direction.

Resistance is at .9300, .9324, .9364, .9384, .9406, and .9579. Support is at.9250, .9184, .9073 (100 SMA), .9039, .9002, and .8927.

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.

GBPJPY—rallying

The pair appears to have found support at 143.00, a round number and prior support. I took additional profit from my short from144.72 at +112 pips. It touched 143.94 this morning, fell back, and has now reached a high, so far, of 144.04 so it's possible it will return to the 145 area. Successfully clearing and closing above 144.10 on the hourly chart will make this more likely. I'll probably try another short at 144.97.

You can sometimes guage the potential behavior of this pair by assessing risk averion. If there's greater appetite for risk then this pair often rises. Looking at the USD index can sometimes give a clue but it's a mixed bag this morning. The USD index closed lower Friday for the second consecutive day but is higher this morning, no doubt because of concern over whether the Greek rescue package will be sufficient and whether Spain will be able to lower its deficit given its high unemployment rate. However, there is still bearish sentiment for the USD.

Support is at 143.00, 142.82, 142.21, 141.60 and 140.28. Resistance is at 144.10, 144.32, 145.02, 145.22/30, 145.54 and 145.98.

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.