Aussie came through today, touching a low of 1.0603 a few minutes ago. A sustained close below 1.06 would be good news for the bears. I am bearish short-term but it is important to remember that the pair is still in an overall uptrend.
© 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.
Showing posts with label AUDUSD. Show all posts
Showing posts with label AUDUSD. Show all posts
Wednesday, June 1, 2011
AUDUSD—back at resistance
The Aussie drifted back to a high of 1.0753 overnight. Drifted is the correct word. The move did not have a lot of energy and one can see the lack of momentum in the diverging RSI on the one-hour chart. In doing this, it took out my short from yesterday at breakeven but I re-established it this morning at a better price.
As I wrote yesterday, on the daily chart, the picture appears corrective with a three-wave structure down to the 1.0441 price. The pair would be in the B wave. Given that the 1.0757 prior high was near the monthly 1.0746 pivot calculation as well as near the .382 retracement of 1.0724 (1.0257/1.1012), the fact that this is serving as resistance again this morning is significant.
It is true, though, that a pair that hangs around just below resistance can often break through it. Should it do so, the next resistance is at 1.0820 and then 1.0889. Support on the four-hour chart is at 1.0690 and 1.0634. The latter is the short-term support line but also at the 50% point of the 1.0257/1.1012 range. A break below 1.0600 opens up the possibility of
1.0567, 1.0441, and 1.0359.
Here is the one-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.
The Aussie drifted back to a high of 1.0753 overnight. Drifted is the correct word. The move did not have a lot of energy and one can see the lack of momentum in the diverging RSI on the one-hour chart. In doing this, it took out my short from yesterday at breakeven but I re-established it this morning at a better price.
As I wrote yesterday, on the daily chart, the picture appears corrective with a three-wave structure down to the 1.0441 price. The pair would be in the B wave. Given that the 1.0757 prior high was near the monthly 1.0746 pivot calculation as well as near the .382 retracement of 1.0724 (1.0257/1.1012), the fact that this is serving as resistance again this morning is significant.
It is true, though, that a pair that hangs around just below resistance can often break through it. Should it do so, the next resistance is at 1.0820 and then 1.0889. Support on the four-hour chart is at 1.0690 and 1.0634. The latter is the short-term support line but also at the 50% point of the 1.0257/1.1012 range. A break below 1.0600 opens up the possibility of
1.0567, 1.0441, and 1.0359.
Here is the one-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.
Tuesday, May 31, 2011
AUDUSD—resistance
By any reasonable technical analysis on the weekly chart, AUDUSD is still in an uptrend. One could argue that the pair recently completed an ABC correction with the drop from 1.1012 to 1.0537 being leg A, the rise to 1.0889 being B, and the slump to 1.0441 being almost the point at 1.0414 where C would equal A. If this were true, then one would expect price to resume rising and to surpass the 1.1012 high. I do have price targets up to 1.14. However, the pair is stumbling a bit in a resistance area.
From the 1.0441 low, Aussie has reached a high of 1.0757. On the daily chart, the picture appears corrective with a three-wave structure down to the 1.0441 price. This rise, then, would be wave B, a remnant of the former trend. The high so far of 1.0757 is near the monthly 1.0746 pivot calculation as well as near the .382 retracement of 1.0724 (1.0257/1.1012).
I had a sell order on the table that was filled Friday at 1.0725. I have moved the stop to breakeven. A more reasonable stop would be just above the recent high (1.0757) but I have been out of the market for a few days and need to get my bearings back. I can always short again if this one stops out. If price moves above 1.0889, I expect that would mean the larger trend is resuming. Note that there is positive divergence on the four-hour chart.
If the price breaks below 1.0607, the downtrend line beginning at 1.1012 on the four-hour chart, support is at 1.0567, 1.0441, and 1.0359.
Here is the four-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.
From the 1.0441 low, Aussie has reached a high of 1.0757. On the daily chart, the picture appears corrective with a three-wave structure down to the 1.0441 price. This rise, then, would be wave B, a remnant of the former trend. The high so far of 1.0757 is near the monthly 1.0746 pivot calculation as well as near the .382 retracement of 1.0724 (1.0257/1.1012).
I had a sell order on the table that was filled Friday at 1.0725. I have moved the stop to breakeven. A more reasonable stop would be just above the recent high (1.0757) but I have been out of the market for a few days and need to get my bearings back. I can always short again if this one stops out. If price moves above 1.0889, I expect that would mean the larger trend is resuming. Note that there is positive divergence on the four-hour chart.
If the price breaks below 1.0607, the downtrend line beginning at 1.1012 on the four-hour chart, support is at 1.0567, 1.0441, and 1.0359.
Here is the four-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.
Tuesday, May 24, 2011
AUDUSD—daily chart
Aussie is drifting down within the downward sloping rectangle. The low so far is 1.0480 although it bounced a bit from there to 1.0580. On the hourly chart, the price action looks somewhat sluggish. The low of 1.0480 was below the .382 retracement of the move from .9706 to 1.1012. However, as I blogged last week, there is support in this area. The retracement of .382 of the move from .9537 to 1.1012 is 1.0439. The C leg equals the A leg of the ABC correction at 1.0414. The weekly S1 pivot calculation was 1.0444. The price objective from the triangle last week on the hourly chart was 1.0443.
The 50% retracement of 9706/11012 is around 1.0353—that is a good possibility if prices sink below the 1.0480 low. On the hourly chart, that low resulted in a hammer. The lower boundary of the rectangle is currently at 1.0293.
From a bullish perspective, this entire price action could be a bull flag on the daily chart. If so, price can still sink to the bottom of the flag (the downward sloping rectangle) at 1.0293 before rallying. There is still a long-term uptrend line in play from last June with a second touch in March. However, the market is clearly readjusting.
Here is 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.
The 50% retracement of 9706/11012 is around 1.0353—that is a good possibility if prices sink below the 1.0480 low. On the hourly chart, that low resulted in a hammer. The lower boundary of the rectangle is currently at 1.0293.
From a bullish perspective, this entire price action could be a bull flag on the daily chart. If so, price can still sink to the bottom of the flag (the downward sloping rectangle) at 1.0293 before rallying. There is still a long-term uptrend line in play from last June with a second touch in March. However, the market is clearly readjusting.
Here is 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.
Wednesday, May 18, 2011
AUDUSD—hourly chart
Aussie broke above the triangle yesterday to a high of 1.0665. This was just above former short-term price resistance and price is now drifting downward and has almost reached the extended line of the triangle from yesterday's hourly chart.
This may serve as support (at/above 1.0559) or it could have been a fake-out move. If price bounces from there, it's a failed pattern (at least from the Elliott perspective) and could be the basis for some good gains. However, one will want to watch momentum if trading on this short time-frame.
One can look at this entire mess from the price high of 1.1012 as a complex correction, a double from an Elliott perspective.
Support is still present in the 1.05 area. A retracement of .382 of the move from .9706 to 1.1012 is 1.0513 and that same price is the monthly S1 pivot calculation. The weekly 10 EMA is 1.0533. There is also the psychological 1.05 round number.
Beneath 1.05 is also good support down to 1.04. The retracement of .382 of the move from .9537 to 1.1012 is 1.0439. The C leg equals the A leg of the ABC correction at 1.0414. The weekly S1 pivot calculation is 1.0444. The price objective from the triangle itself is 1.0443. After 1.04 is 1.0359, (50% of .9706/1.1012).
Resistance is 1.0665, then 1.0717.
Here is the one-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.
This may serve as support (at/above 1.0559) or it could have been a fake-out move. If price bounces from there, it's a failed pattern (at least from the Elliott perspective) and could be the basis for some good gains. However, one will want to watch momentum if trading on this short time-frame.
One can look at this entire mess from the price high of 1.1012 as a complex correction, a double from an Elliott perspective.
Support is still present in the 1.05 area. A retracement of .382 of the move from .9706 to 1.1012 is 1.0513 and that same price is the monthly S1 pivot calculation. The weekly 10 EMA is 1.0533. There is also the psychological 1.05 round number.
Beneath 1.05 is also good support down to 1.04. The retracement of .382 of the move from .9537 to 1.1012 is 1.0439. The C leg equals the A leg of the ABC correction at 1.0414. The weekly S1 pivot calculation is 1.0444. The price objective from the triangle itself is 1.0443. After 1.04 is 1.0359, (50% of .9706/1.1012).
Resistance is 1.0665, then 1.0717.
Here is the one-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.
Tuesday, May 17, 2011
AUDUSD—triangle
Aussie is still below its broken trend line. The dip to 1.0514 took it slightly below last week's hammer low of 1.0537. This is not good. It is currently coiling within a symmetrical triangle. Symmetrical triangles are often continuation moves although they do not have to be. From an Elliott perspective, a triangle always resolves with price action continuing in the direction from which it entered the triangle, downward in this case. Looking at price behavior from the high of 1.1012, an ABC correction is taking place, with the C wave unfolding. The potential price for the C wave is 1.0595 at .618 of A, 1.0414 where it would be equal to A, and 1.0120 where it would be 1.618 of A.
There is some good support in the 1.05 area. A retracement of .382 of the move from .9706 to 1.1012 is 1.0513 and that same price is the monthly S1 pivot calculation. The weekly 10 EMA is 1.0533. There is also the psychological 1.05 round number.
Beneath 1.05 is also good support down to 1.04. The retracement of .382 of the move from .9537 to 1.1012 is 1.0439. The C leg equals the A leg of the ABC correction at 1.0414. The weekly S1 pivot calculation is 1.0444. The price objective from the triangle itself is 1.0443. After 1.04 is 1.0359, (50% of .9706/1.1012).
Triangle resistance is 1.0604. There should be one more move up to this price before prices break downward (if they are going to break downward). Short-term price resistance is at 1.0642 and then 1.0717.
Here is the one-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.
There is some good support in the 1.05 area. A retracement of .382 of the move from .9706 to 1.1012 is 1.0513 and that same price is the monthly S1 pivot calculation. The weekly 10 EMA is 1.0533. There is also the psychological 1.05 round number.
Beneath 1.05 is also good support down to 1.04. The retracement of .382 of the move from .9537 to 1.1012 is 1.0439. The C leg equals the A leg of the ABC correction at 1.0414. The weekly S1 pivot calculation is 1.0444. The price objective from the triangle itself is 1.0443. After 1.04 is 1.0359, (50% of .9706/1.1012).
Triangle resistance is 1.0604. There should be one more move up to this price before prices break downward (if they are going to break downward). Short-term price resistance is at 1.0642 and then 1.0717.
Here is the one-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.
Friday, May 6, 2011
AUDUSD—3-hour price
On the regular 3-hour price chart, the Aussie formed a hammer candle at the low. However, it broke its uptrend line on the way down and I take trend lines seriously. Nonetheless, based on the hammer and the P&F chart support I blogged about below, I bought yesterday at 1.0618. Note, though, that it's at the short-term downtrend line resistance. This could be 4th wave, the remnant of the prior uptrend. Time to take a little off the table in the way of profits.
Here's the 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.
Here's the 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.
AUDUSD—P&F
On my three-hour point and figure chart (P&F), the 45° internal support line held yesterday's drop to 1.0537.
A P&F chart shows only price change and disregards time. Because the chart does not change unless price changes by a predetermined amount, many see these types of charts as a way of depicting uncontaminated supply and demand. There is also a belief it shows volume indirectly since price does not usually change unless there is volume behind the change.
The "X" column means price is increasing; the "0" column, that it is decreasing. The 45° support line is more objective than trend lines drawn on regular price charts (at least according to aficionados of the method).
I find the use of P&F charts valuable but use them as an adjunct to my other approaches.
Here is the 3-hour chart for the AUDUSD. I draw it on a closing basis for the three-hour period. One can see that the The 45° support line held nicely and the pair has rallied. This line was also at the point of a triple breakout on the chart. Resistance on this chart is now at 1.0950.
© 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.
A P&F chart shows only price change and disregards time. Because the chart does not change unless price changes by a predetermined amount, many see these types of charts as a way of depicting uncontaminated supply and demand. There is also a belief it shows volume indirectly since price does not usually change unless there is volume behind the change.
The "X" column means price is increasing; the "0" column, that it is decreasing. The 45° support line is more objective than trend lines drawn on regular price charts (at least according to aficionados of the method).
I find the use of P&F charts valuable but use them as an adjunct to my other approaches.
Here is the 3-hour chart for the AUDUSD. I draw it on a closing basis for the three-hour period. One can see that the The 45° support line held nicely and the pair has rallied. This line was also at the point of a triple breakout on the chart. Resistance on this chart is now at 1.0950.
© 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.
Thursday, May 5, 2011
AUDUSD—weekly support
Weekly support from the steep uptrend line drawn from .9706 is 1.0647. The most recent low is 1.0643. A break below this opens up 1.0570 and 1.0444.
It's also possible the pair will base here. Watch momentum on the shorter-term charts. For example, on the one-hour chart, there is positive divergence with RSI.
It's also possible the pair will base here. Watch momentum on the shorter-term charts. For example, on the one-hour chart, there is positive divergence with RSI.
Friday, April 29, 2011
AUDUSD—another new high
Ridiculous but welcome since I'm still long from .9940. I took profits on other position. New high this morning of 1.0964.
Monday, April 25, 2011
AUDUSD—comparison of two up trends
On the monthly chart, a comparison of two up trends is interesting as to time and price.
The current ascent began with the 10/2008 low of .6007 to the recent high of 1.0778. This was 4,771 pips over a period of 31 months. The ascent that began with the 4/2001 low of .4775 to the 7/2008 high of .9851, totaled 5,076 pips over a period of 88 months. The gains from 2008 have been 94% of those in the prior uptrend but in only 35% of the time. Has price gotten ahead of time?
Momentum, as measured by RSI, is also more gradual in the current up trend. Even with the meteoric rise the Aussie has been experiencing, RSI is not "overbought" (over 70). Nor has it achieved its prior highs—negative divergence with price. If ever there was a good example of how one cannot trade divergence by itself, this is it.
Look closer at the divergence though. Connie Brown, writing in Technical Analysis for the Trading Professional, discusses a positive or negative reversal, a hidden divergence. For example, I wrote the words positive reversal below the down slanting red line under RSI between 2003 and 2006. She describes this as the market building internal strength—price is higher but there is a new oscillator low. She provides a method of calculating price moves from these and, in this case, her method resulted in a price target of .9473, quite a bit lower than the .9851 high but arguably higher than one might have otherwise calculated at that point in time, especially if one let oneself be blinded by the negative divergence.
Another interesting characteristic of the chart is the AB=CD comparison. In the former uptrend, AB (4775/8010) was 3,235 pips. CD (6774/9851) was 3,077 pips. Close enough. In the current uptrend, AB (6007/9408) is 3,401 pips. If CD is equal to that, then the price target for CD is 1.1467. Far-fetched? Perhaps. If the pair made it to the top of the upward sloping rectangle, that would be about 1.15. I also have a daily point and figure target of 1.14.
As I wrote last week, that the Commitment of Traders report is near an extreme of non-commercial longs to shorts. Extremes are not a good thing. However, you cannot trade that either. Even if the Aussie suffered a sharp correction, the overall trend from .4775 is up with two touches of the trend line.
Resistance is between 1.0750 and 1.0830, then 1.0900. Support is at 1.0583. Additional support is at 1.0444, 1.0390, 1.0289, 1.0248 and 1.0205.
For those who trade on shorter periods than the monthly chart, there are many opportunities to buy and sell but buying pullbacks has obviously been a good strategy for the last several years.
Here's the monthly 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.
The current ascent began with the 10/2008 low of .6007 to the recent high of 1.0778. This was 4,771 pips over a period of 31 months. The ascent that began with the 4/2001 low of .4775 to the 7/2008 high of .9851, totaled 5,076 pips over a period of 88 months. The gains from 2008 have been 94% of those in the prior uptrend but in only 35% of the time. Has price gotten ahead of time?
Momentum, as measured by RSI, is also more gradual in the current up trend. Even with the meteoric rise the Aussie has been experiencing, RSI is not "overbought" (over 70). Nor has it achieved its prior highs—negative divergence with price. If ever there was a good example of how one cannot trade divergence by itself, this is it.
Look closer at the divergence though. Connie Brown, writing in Technical Analysis for the Trading Professional, discusses a positive or negative reversal, a hidden divergence. For example, I wrote the words positive reversal below the down slanting red line under RSI between 2003 and 2006. She describes this as the market building internal strength—price is higher but there is a new oscillator low. She provides a method of calculating price moves from these and, in this case, her method resulted in a price target of .9473, quite a bit lower than the .9851 high but arguably higher than one might have otherwise calculated at that point in time, especially if one let oneself be blinded by the negative divergence.
Another interesting characteristic of the chart is the AB=CD comparison. In the former uptrend, AB (4775/8010) was 3,235 pips. CD (6774/9851) was 3,077 pips. Close enough. In the current uptrend, AB (6007/9408) is 3,401 pips. If CD is equal to that, then the price target for CD is 1.1467. Far-fetched? Perhaps. If the pair made it to the top of the upward sloping rectangle, that would be about 1.15. I also have a daily point and figure target of 1.14.
As I wrote last week, that the Commitment of Traders report is near an extreme of non-commercial longs to shorts. Extremes are not a good thing. However, you cannot trade that either. Even if the Aussie suffered a sharp correction, the overall trend from .4775 is up with two touches of the trend line.
Resistance is between 1.0750 and 1.0830, then 1.0900. Support is at 1.0583. Additional support is at 1.0444, 1.0390, 1.0289, 1.0248 and 1.0205.
For those who trade on shorter periods than the monthly chart, there are many opportunities to buy and sell but buying pullbacks has obviously been a good strategy for the last several years.
Here's the monthly 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
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.
Thursday, April 7, 2011
AUDUSD—new highs
AUDUSD reached a new high this morning of 1.0495. This was the first of several price targets in a zone that extends to 1.0550/95. I've unloaded some longs but still have two positions. I'd expect a reaction between there and 1.0600. Note that some trend lines intersect near 1.0700. (I don't disregard old broken trend lines). There are additional price targets up to 1.1400. While it certainly would not achieve that soon, this currency is a bullish freight train. Since the low in 2008 of 6007, Aussie has gained 4,488 pips, a gain of 75%. One could have done far worse than to simply buy dips in this currency. Commodity currencies in general are strong.
There is negative divergence on the daily chart. However, daily candles are strong—they are not throwing off many upper shadows. If it were, it would be a hint the market is rejecting higher prices.
Support is at 1.0289/57.
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.
There is negative divergence on the daily chart. However, daily candles are strong—they are not throwing off many upper shadows. If it were, it would be a hint the market is rejecting higher prices.
Support is at 1.0289/57.
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.
Tuesday, April 5, 2011
AUDUSD—correcting
After yesterday's high of 1.0422, Aussie has pulled back to a low of 1.0289, breaking below its short-term uptrend line. RSI also broke below its uptrend line. The pair appears to be trying to hammer out a bottom here. This is close to key support at 1.0257, the December high. Below that is support at 1.0200, then 1.0143 and 1.0059. If the pair can base here and begin another push upwards, it needs to take out the 1.0422. If so, 1.0500 is next. This would be in line with the overall uptrend that has been in place since 2008. Here's the 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.
© 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.
Thursday, March 31, 2011
EURUSD—going nowhere for now
Euro has been in a small range this week from a low of 1.4027 to 1.4149. I'm still short, thinking there will be a break to the downside. This is because of the ABC corrective look of the daily price action as well as the longer downtrend, in effect since July 2008. My stop is at breakeven.
On the hourly chart, the hour just closed (10 AM EST) is a hammer. Since it's near the range support, there may be another bounce but the immediate resistance is 1.4149, followed by the prior high of 1.4248 from last week and the key 1.4283 November 2010 high.
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.
On the hourly chart, the hour just closed (10 AM EST) is a hammer. Since it's near the range support, there may be another bounce but the immediate resistance is 1.4149, followed by the prior high of 1.4248 from last week and the key 1.4283 November 2010 high.
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—new high
AUDUSD made a new high this morning, 1.0362. It has achieved several price targets with this high; there are still targets up into the 1.06 area. On the way there, however, there will be some key resistance. 1.0400 is psychological. On the weekly chart, there is resistance at 1.0500.
On the three-hour chart, price has pulled back to the uptrend line. I added a fourth small position. If it falls below the uptrend line, look for support at 1.0314 and 1.0205.
© 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 three-hour chart, price has pulled back to the uptrend line. I added a fourth small position. If it falls below the uptrend line, look for support at 1.0314 and 1.0205.
© 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, March 28, 2011
AUDUSD—broke above 1.03
Aussie finally made it above 1.03 to 1.0314 as of earlier this morning.
At the beginning of January, I wrote that, "1.0307 is the top upward line drawn on the weekly chart below. There was an inverted head and shoulder pattern on the daily chart (not shown) that I blogged about in November. Its target is 1.0371".
It would be logical to see some correction as this is at or nearing strong resistance. In addition to being near price targets, 1.0333 was the 7/82 high. Calculating the weekly pivot point finds RS at 1.0369. Therefore, while there may be additional moves up to the 1.0370, a correction may kick in at any point. A correction could cause price to drop to 1.0080/65 (near the .382 retracement of the move up from .9706) or parity. Only if the pair drops below .9706, do possibilities that are more bearish come back into play. It's worth noting on the weekly chart below that there is still negative divergence with RSI.
The next potential target is 1.05 near the upper boundary drawn on the weekly chart below (the same line that targeted 1.0307) and a price target zone from various calculations.
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.
At the beginning of January, I wrote that, "1.0307 is the top upward line drawn on the weekly chart below. There was an inverted head and shoulder pattern on the daily chart (not shown) that I blogged about in November. Its target is 1.0371".
It would be logical to see some correction as this is at or nearing strong resistance. In addition to being near price targets, 1.0333 was the 7/82 high. Calculating the weekly pivot point finds RS at 1.0369. Therefore, while there may be additional moves up to the 1.0370, a correction may kick in at any point. A correction could cause price to drop to 1.0080/65 (near the .382 retracement of the move up from .9706) or parity. Only if the pair drops below .9706, do possibilities that are more bearish come back into play. It's worth noting on the weekly chart below that there is still negative divergence with RSI.
The next potential target is 1.05 near the upper boundary drawn on the weekly chart below (the same line that targeted 1.0307) and a price target zone from various calculations.
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, March 21, 2011
AUDUSD—monthly
The monthly chart still shows a strong uptrend for this pair. However, the key number for the pair to overtake is 1.0257.
© 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.
AUDUSD—good rally
The pair closed the week Friday below parity at .9959. Note that last week's low of .9706 confirmed the double top with a potential price target of .9401. However, the rally has been strong—the pair touched 1.0070 this morning, well above the .618 from the move down from 1.0158. I went long last week at .9940 with a price target of 1.0053. Obviously, I took some profits at that point. Before reversing and going short, however, I need to see multiple bearish signals on the shorter-term charts.
On the hourly chart, the pair looks as though it's completing a third wave up so expect a reaction, possibly only to 1.0054 or .9987. Below that is support at .9959, then .9872 and .9781.
Here's the hourly 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.
On the hourly chart, the pair looks as though it's completing a third wave up so expect a reaction, possibly only to 1.0054 or .9987. Below that is support at .9959, then .9872 and .9781.
Here's the hourly 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.
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