Thursday, April 21, 2011
No posts Good Friday
Tomorrow is Good Friday and I will not be posting. For those who celebrate Easter, have a glorious and blessed holiday.
Lower liquidity
Once London closes today, expect much lower liquidity as we move into a holiday weekend.
EURUSD—new high
New high yesterday; new high today of 1.4649. The bulls are frothing at the mouth. The real Elliott Wave people (i.e. those who follow the rules and guidelines of the theory correctly and not those who distort the theory to suit their own means) are very quiet since most reasonable EW interpretations has been calling for a drop. So where might price go from here?
We're beyond a few price targets. Probably nobody much remembers the daily flag whose pole began at 1.2874 and ended at 1.3862 before forming the flag. That price target was 1.4566. Resistance is at the round numbers of course—1.47, 1.48, etc. If we are in a double ABC correction on the weekly chart, such as I posted on April 8 with the A wave beginning at 1.2859, then 1.618 of A is 1.5052. The top of the daily rectangle is at 1.5016. The two together will make for nice resistance if Euro should climb that far. Above that is the November 2009 high of 1.5144. I have a target on my daily Point and Figure chart of 1.5620 but I do not believe the European Central Bank has enough money to push it up that high, ha-ha. Everyone seems to forget this rise is taking place within some interesting fundamental factors. Euro bulls would call those sour grapes but I don't see why we all have to pretend the emperor is wearing new clothes.
Note that there is a broadening top forming. There are only two touches so far (if this is a high before a correction). An orthodox broadening top requires three touches at the top. These are deadly because they suggest a highly excited, out of control market. So if one is inclined to go long, buy on a pullback, watch momentum, and use tight stops.
There is negative divergence on the three-hour chart. Nearby support is at 1.4577 (the very steep short-term uptrend line), 1.4517 (prior resistance, short-term), 1.4451 (.618 of 1.6041/1.1876), 1.4400 and 1.4341 (lower boundary of the daily rectangle).
Here is a three-hour chart.
© 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.
We're beyond a few price targets. Probably nobody much remembers the daily flag whose pole began at 1.2874 and ended at 1.3862 before forming the flag. That price target was 1.4566. Resistance is at the round numbers of course—1.47, 1.48, etc. If we are in a double ABC correction on the weekly chart, such as I posted on April 8 with the A wave beginning at 1.2859, then 1.618 of A is 1.5052. The top of the daily rectangle is at 1.5016. The two together will make for nice resistance if Euro should climb that far. Above that is the November 2009 high of 1.5144. I have a target on my daily Point and Figure chart of 1.5620 but I do not believe the European Central Bank has enough money to push it up that high, ha-ha. Everyone seems to forget this rise is taking place within some interesting fundamental factors. Euro bulls would call those sour grapes but I don't see why we all have to pretend the emperor is wearing new clothes.
Note that there is a broadening top forming. There are only two touches so far (if this is a high before a correction). An orthodox broadening top requires three touches at the top. These are deadly because they suggest a highly excited, out of control market. So if one is inclined to go long, buy on a pullback, watch momentum, and use tight stops.
There is negative divergence on the three-hour chart. Nearby support is at 1.4577 (the very steep short-term uptrend line), 1.4517 (prior resistance, short-term), 1.4451 (.618 of 1.6041/1.1876), 1.4400 and 1.4341 (lower boundary of the daily rectangle).
Here is a three-hour chart.
© 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.
Wednesday, April 20, 2011
EURUSD—above resistance
With the high this morning of 1.4547, Euro is above the 1.4520 resistance that had capped a congestion range. It is clear that buyers did enter as I wrote about the weekly chart on Monday. Because it held at 1.4157, that strengthens that area which was already a strong support zone.
If Euro can maintain the move, the target of the top of the daily triangle at 1.4969 is possible. However, note the negative divergence on the daily chart. Failure here will find support at 1.4326 (the lower boundary of the rectangle), 1.4157 and the psychological 1.40.
Here's the daily chart:
© 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.
If Euro can maintain the move, the target of the top of the daily triangle at 1.4969 is possible. However, note the negative divergence on the daily chart. Failure here will find support at 1.4326 (the lower boundary of the rectangle), 1.4157 and the psychological 1.40.
Here's the daily chart:
© 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.
AUDUSD—nice move
With the new high this morning of 1.0687, Aussie has accomplished a major price target. I added two positions yesterday at 1.0500 thinking this was perhaps a bit high for an entry but one of them hit their profit target at 1.0650 and the other is still on. My other two positions are from .9940 and 1.0236. I've taken partial profits on the one from .9940.
Where is it going to go from here? As I wrote yesterday, I have price targets at various levels up to 1.14. In the minutes released yesterday by the Reserve Bank of Australia, there is comment that since Japan is a major export market for Australia and since there is going to be massive rebuilding and reconstruction in Japan, Australia's exports to Japan may increase. What is interesting is that exporters usually find a strong currency to be a challenge. The Australian dollar is very strong indeed.
Since 1.0650 was a major target, one would expect sellers to take some profits. This should depress prices a bit—let's see if it happens or if buyers are on a tear. It is difficult to believe price can keep rising like this. Where are the buyers who have not already bought in? On the most recent Commitment of Traders report, there were 97,153 long noncommercial traders and only 6,502 short ones. These are extremes. Such extremes do not occur frequently.
First level of support should now be at 1.0583. Additional support is at 1.0444, 1.0390, 1.0289, 1.0248 and 1.0205.
Below is the three-hour chart I prepared yesterday where I entered because there was a hammer at the low of 1.0444 and it was near a price projection I had made for an ABC correction.
© 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.
Where is it going to go from here? As I wrote yesterday, I have price targets at various levels up to 1.14. In the minutes released yesterday by the Reserve Bank of Australia, there is comment that since Japan is a major export market for Australia and since there is going to be massive rebuilding and reconstruction in Japan, Australia's exports to Japan may increase. What is interesting is that exporters usually find a strong currency to be a challenge. The Australian dollar is very strong indeed.
Since 1.0650 was a major target, one would expect sellers to take some profits. This should depress prices a bit—let's see if it happens or if buyers are on a tear. It is difficult to believe price can keep rising like this. Where are the buyers who have not already bought in? On the most recent Commitment of Traders report, there were 97,153 long noncommercial traders and only 6,502 short ones. These are extremes. Such extremes do not occur frequently.
First level of support should now be at 1.0583. Additional support is at 1.0444, 1.0390, 1.0289, 1.0248 and 1.0205.
Below is the three-hour chart I prepared yesterday where I entered because there was a hammer at the low of 1.0444 and it was near a price projection I had made for an ABC correction.
© 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.
Tuesday, April 19, 2011
AUDUSD—weekly
The most noticeable characteristic on the weekly chart, besides the robust uptrend, is the doji candle that formed this past week. This candle is a dragonfly doji. In the dragonfly, the open and close takes place at or very near the high. In this case, the high for the week was 1.0581 (almost spot on the high of the prior week at 1.0583 that was the open for the week) and the close was 1.0566. The low for the week was 1.0390. Many see this type candle as bullish because psychologically it shows that price dropped to lower lows but managed to close near the highs. Nonetheless, it reinforces resistance at 1.0583.
Any type of doji, after up trend, hints that the market may be running out of steam. This doji, coming as it does at a new high, is suspicious. If this week's price action results in the Aussie closing at lower lows, then it will confirm an evening star pattern which. This is bearish.
Still, bearishness may only mean a correction before the uptrend resumes. After 1.0390, there is strong support in a price zone from 1.0289/82 (week ending 4/8 low and weekly 10 EMA) down to 1.0248 (.382 of the 9704/10583 move) and 1.0205. With such a strong uptrend in place, this zone most likely would hold any correction.
I'm still long with various positions from .9940. I would probably add on significant dips. It is true that this trend is mature and it is true there is negative divergence on the weekly chart. However, unless we're going to have a significant correction across many markets and unless there is going to be some sort of policy change that supports the US dollar (haha, let me not choke laughing), it's more likely the Aussie will resume an uptrend after any correction. If it does so, 106.50 is next and there are price targets up to 114. Of course much backing and filling would occur along the way.
Here's the weekly chart:
© 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.
Any type of doji, after up trend, hints that the market may be running out of steam. This doji, coming as it does at a new high, is suspicious. If this week's price action results in the Aussie closing at lower lows, then it will confirm an evening star pattern which. This is bearish.
Still, bearishness may only mean a correction before the uptrend resumes. After 1.0390, there is strong support in a price zone from 1.0289/82 (week ending 4/8 low and weekly 10 EMA) down to 1.0248 (.382 of the 9704/10583 move) and 1.0205. With such a strong uptrend in place, this zone most likely would hold any correction.
I'm still long with various positions from .9940. I would probably add on significant dips. It is true that this trend is mature and it is true there is negative divergence on the weekly chart. However, unless we're going to have a significant correction across many markets and unless there is going to be some sort of policy change that supports the US dollar (haha, let me not choke laughing), it's more likely the Aussie will resume an uptrend after any correction. If it does so, 106.50 is next and there are price targets up to 114. Of course much backing and filling would occur along the way.
Here's the weekly chart:
© 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.
Monday, April 18, 2011
EURUSD—weekly
Euro high last week was 1.4520 before dropping off to a low of 1.4267 this morning. This is major support since 1.4263/43 was a prior high and parity. Beneath that is 1.4227 (.382 of the move up from 1.3752) and 1.4223 (the broken long-term downtrend line on the weekly chart). Buyers may well enter. If the bulls fail to hold price there, then below that is a support zone beginning at 1.4166 down through 1.4103. Note that the pair is still within the rectangle on the weekly chart and could move up rather sharply.
On the weekly chart, there is a possible evening star forming. This is a three-candle pattern where the first candle is a strong bullish candle, the second is a much smaller sometimes doji star, and the third candle closing deeply within the first one. Forming at resistance, as it is, adds more significance if the close at the end of the week confirms the pattern. That is not tradable for many short-term traders but the way to trade it, if you believe it is going to happen, is to short rallies on the shorter-term charts.
© 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.
On the weekly chart, there is a possible evening star forming. This is a three-candle pattern where the first candle is a strong bullish candle, the second is a much smaller sometimes doji star, and the third candle closing deeply within the first one. Forming at resistance, as it is, adds more significance if the close at the end of the week confirms the pattern. That is not tradable for many short-term traders but the way to trade it, if you believe it is going to happen, is to short rallies on the shorter-term charts.
© 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.
USDJPY—daily This pair continues to show some interesting but messy price behavior. On the daily chart, a flag pattern is forming, possible consolidation on the way to higher prices. If this is a flag, the target is 92.13, which seems somewhat unlikely although certainly not impossible. However, before this ever happened, bulls need to carry the price above 84.20/77, 85.16 and the recent spike high of 85.52. Note that the price has moved back inside the triangle (the dotted lines) that contained it for the most part over the last several months. The low so far has been 82.65, very close to the support I blogged about last week of 82.56. A .382 retracement of the recent move up from the 76.59 low would be 82.11; 50% is 81.06. Here's the daily chart: 
© 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.
© 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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