Euro has rallied to 1.4299 in what appears to be an ABC correction on the hourly chart (Wave A is 1.4074 to 1.4222; wave B drops from there to 1.4128). This means C has the potential of 1.4219, 1.4276, and 1.4367 so price is just above the point where C would equal A. The 50% retracement of the move down from Tuesday's high of 1.4497 is 1.4286; .618 would be 1.4335. There is additional resistance up to 1.4445 and of course the prior high of 1.4497. The latter is key resistance—if that breaks then it negates many bearish signals.
Price has not met the bear flag target of 1.3994. What is troublesome is that if one examines RSI on the daily chart, it is maintaining itself above 34.92, the low of RSI in January. That needs to start dropping to support the idea that the bearish view is the correct one. Euro also managed to stay within support (the internal 45° line) on the daily and three-hour point and figure charts I maintain.
Nonetheless, the case is still there for being in a third wave down. Let's see what unfolds.
© Dianne Fecteau, 2011. 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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