An EW Look at the Euro

I haven’t done an Elliott Wave (EW) count on the EURUSD daily chart since 25 September so it’s time, especially now that Euro has left its extended, excruciating stay in the 1.47 range. Last night it made a high of 1.4995. It’s so close to 1.50, a big psychological number. “Yahooey,” I imagine the Euro bulls are saying. “Just a bit longer in the saddle and we’ll be there!”

You can’t blame them. After all, there are some nice targets over 1.50. Besides which, all the people who have been selling short (not only Euro but in the equity markets and other currencies) will be proven definitively and absolutely wrong. Those of little faith, those who believe a rising equity market really does require rising volume, and finally, those stubborn coots who just won’t go along with the big boys in Washington/London/Wherever saying, “Dow’s up, kiddos, get over it. What recession? Sure, the Emperor has new clothes.”

OK, enough foolishness. Euro is up, past the point many people believed it would go. Updating my EW count, I still believe this might be wave C of a correction from the move down from July ’08 highs. In other words, a primary wave two. A wave two can correct all the way to wave one’s origin. That means 1.6041. Oh, to find a way to buy if that’s true. It could also fall short of that. Or this might be the top and it will now turn down. Could go higher; could go lower. That sounds about as definitive as most so-called trading advice, LOL.

One interesting thing is that it could be forming an ending diagonal. According to Frost and Prechter in their book, Elliott Wave Principle, an ending diagonal, “occurs primarily in the fifth wave position at times when the preceding move has gone ‘too far too fast,’ as Elliott put it.” (p.37). Sometimes these end with a “throw-over” which means a break of the upper line of the diagonal. If it is an ending diagonal we can expect a retreat to at least the beginning of the formation which would be in the 1.45 range. Who would find this unreasonable? Not I.

Here’s the thing—as a trader I’m looking for trades that have a probability of making money. So I might try a short sometime soon given that:

1) 1.50 is a psychological resistance level
2) This could be an ending diagonal. If not, it’s a range bound movement
3) The current uptrend is very steep and it’s difficult to maintain such steep angles

Before we go to shorter time frames, here’s the daily chart:

Now that I’ve taken a look at the daily chart, I want to examine the shorter time frames. It’s there that one can sense what may be unfolding. Looking at the one hour chart one sees some bearish and indecisive candles as well as a break of a short term trend line in price and RSI. I’ll be watching this pair. Of course, a definitive break above 1.50 would mean a buy. Here’s the one hour chart:


© Dianne Fecteau, 2009. 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--Where to from here?

What's next for EURUSD?

The run up that brought lots of profits from March through September is on pause. While this past Friday’s close was 1.4733, the close three weeks ago was 1.4712. A sideways market.

From the point of view of a classical technical analyst, the pair is in an uptrend. No trend line has been violated; no serious level of support breached.

On the weekly chart (see below) the upward trend line is steep, perhaps too steep to easily continue. The last time it was this steep was the run-up from 2007 to 2008. We all know what happened then.

On the monthly chart, the fall from the summer ’08 highs did breach a trend line that began in early 2002 and had nine touches before that violation. The pair is struggling with that old upward trend line now. It poked its head above it briefly in September as well as last week but seems to have the willies about taking up residence there. This is in the 1.47 area, the area I have talked about as resistance for several weeks. Until the Euro closes definitively above 1.4865 (a weekly and ideally monthly close), I can trade it sideways and the range (1.4480 to 1.4845) is respectable, allowing for more than a few pips to be earned by agile traders.
Here’s the hourly chart showing the trade I entered last week. The stop is now a profit stop. Note the pair violating the two trend lines. Note the negative divergence with RSI. Finally, RSI is staying at or below 50%. The pair needs to drop below the lower shadows I pointed out on the prior candles in order to continue its drop. It could bounce from here as well. The thing is, if you’re in a short, lighten up a bit or close, depending on your style. I’ve lightened a bit. If it fails from the uptrend line (this is, it bumps its head on it and starts down again, dipping below the lower shadows), one could look for another short entry. Or if it climbs back towards 1.48 one could short. Remember though, you want to trade where your stops can be tight.

Thinking about the larger picture, even when one is going to trade short-term, is valuable. Is this a simple pause for breath? Or is it the beginning of a reversal? Ah, the age old question and the question that all the hundreds, if not thousands, of trading techniques and approaches seek to answer.

The dynamism that accompanied the push up to 1.60 last year is not present on this rise from March. A look at the weekly RSI shows it isn’t reaching the levels it did last year. Looking at it from an Elliott Wave (EW) perspective, this could be corrective. In some types of corrective waves, as Frost and Prechter write in their book, Elliott Wave Principle, “Momentum indicators reveal an ebbing of the market’s power (i.e. speed of price change, breadth, and in lower degrees, volume).”If this is true it’s a bearish scenario.

As I’ve mentioned before, the weekly chart here looks corrective to me. I’ve traced the corrective zigzag in red. If the pair can’t move definitively above 1.4865 then it’s possible the path forward is down, down, down. Note that since I’m currently trading this as a sideways market, the bounce off the 13-EMA has been a buy point in the past. Here’s the weekly chart:

These are not trade recommendations. 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. You have to decide on your own approach to trading. Trading is risky. But you know that already.

© Dianne Fecteau, 2009. 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.

Friday morning (10/2)

AUDUSD
I’ve certainly attended to Ozzie’s travels this week, from its low of .8587 at the beginning of the week to the high on Wednesday at .8860. As I write this at 4:40 AM EST it’s down to .8659. Quite possibly it’s headed lower yet. As I pointed out yesterday, an uptrend line I drew on the monthly chart from the lows earlier in the decade came in right about at the high. This old trend line, even though it was violated, could serve as resistance. I also wrote that a horizontal line drawn back to the early 80s showed this area as polarity.

I said if it got back to .8860 I’d watch price behavior and might short. The closest it got was .8833. I, however, was distracted by other tasks and didn’t get in until .8746. Shorting at this level meant my stop had to be wider than I normally prefer above the prior high. But I felt confident, after so much prior uncertainty, that the pair would drop further. Another thing—the average true range (ATR) on this pair is about 115 pips. That impacts where one can set one’s stop. In any case I have a better than breakeven stop on now. I can’t lose money.

How did I reach confidence? Certainly the aforementioned trend line and the history around the price level. Another reason is the ongoing divergence between price and RSI on the daily chart. One would think that if this was the start of a new upswing in the pair that it could have resolved the divergence by now.

A look at the 3-hour chart at the top of this post shows a few things:

1) The candles near the high showed upper wicks. Combined with resistance this signals at least uncertainty and possibly a weakening market.
2) After .8860, the market showed lower highs and lower lows. So now it’s going to head sideways again? This pair is like an unconditioned hiker. Every 20 feet up the mountain it has to stop and catch its breath; slug a drink of water.
3) Is that a possible head and shoulders (H&S)? This is speculative at this point (as if the whole business of trading isn’t, LOL). It could also drop and then rise again to form a less scrunchy, right shoulder. If this does prove to be an H&S its neckline is .8587. But we don’t know yet. We won’t know it until the neckline breaks. If it is the potential price objective is .8314. This is more than believable as it’s roughly support from earlier moves. It’s also a key level if you analyze past highs and lows in the pair’s history.
4) If we’re pattern hunting, there’s more. This could be a triangle. If it’s an Elliott wave triangle, one expects it to break upward. If it’s an ascending triangle, one would still expect it to break upward. In either case it could touch its bottom line again. By the way, the bottom line is not perfectly horizontal. If it was sloping downward a bit more it could be construed as an orthodox broadening pattern. If this happened, it’s deadly after an up trend.

I wrote yesterday that my preferred count in Elliott Wave (EW) speak is that this is a primary wave two correction. These can be dynamic and often retrace a good part of wave one. At .8860 (assuming this is the high) it retraced 89% of the first wave down. 89—a Fibonacci number. Isn’t that interesting!

So what is this pair up to? It’s at minor support now so it may bounce. It may drop further. Or it may not. Look, all this is in the future—“none of this has happened yet,” as the Boss sings on Livin’ in the Future on his Magic CD. There is nobody that can predict this. But if commodities drop, the related commodity currencies could have a nice fall.

One last note—assume for the moment the validity for the moment of the H&S interpretation. If it is then it needs to break the neckline at .8587. If it doesn’t it isn’t one or it’s a failed H&S. These can be very powerful signals as well. More important, that’s a level that I wrote yesterday I should have gone long.

GBPUSD

The original short trade is still on, currently showing 222 pips with a profit stop in place. Yesterday morning I took on another short which stopped at break even. I sold again and that short is now at 98 pips profit. I may close that one in a few moments. As I wrote yesterday, I’m watching short term charts. It did break the short term uptrend line I wrote about. But even if this is the beginning of a big drop in the pound, don’t expect it to give up without a fight.

Other Trades

I’m still long the USDCHF. The pair is lingering and maundering not quite at the top of its channel. I’m long the USDCAD from 1.0762 with the stop at profit. I’m short the EUR/JPY which is slightly in profit.

It’s been a good week—lots of opportunity in the market.

None of the above are trade recommendations. Remember that trading involves substantial risk.
© Dianne Fecteau, 2009. 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.

Thursday morning trades, canoodling with EW Theory, and other thoughts

GBPUSD

Yesterday's short trade is still on. I took a third off the table earlier and have my stop at plus 60 pips. I may move it again soon. I also took another short position earlier this morning and have the stop at breakeven. Note on the three hour chart below how RSI respected its Fib levels. The horizontal orange lines are why I said yesterday I wanted to short around 1.6150. I explained yesterday that I shorted under that because of price behavior. The thing to watch now, in my mind, is how the pair begins to behave as it nears the short uptrend line. Here’s the 3-hour chart but I’ll be watching shorter time frames.
USDCHF

My short was obviously taken out yesterday morning at profit. I entered long on the pullback where it continues to do well. But it’s nearing the top of that channel I’ve shown on prior charts so I need to assess this.

EURUSD

I got in and out of a quick short yesterday. I’m carefully analyzing the recent price activity. My “belief” is that the pair is headed down but you know how beliefs can blind you to what’s really happening? A good price analysis will tell the story.

AUDUSD

Yesterday I wrote that I was out of the Ozzie until I could form a clearer picture. I hypothesized that perhaps we could be in some sort of B wave (Elliott wave speak for corrective waves that are often choppy and difficult to decipher).

I’m not a big fan of the Elliott Wave Theory (EWT) for actual trading because it’s difficult to use it for trades by itself (although I know some people do and more power to them if it is profitable for them). I do, though, count waves. I do spend oodles of time canoodling with my Elliott Wave Principle book (Frost and Prechter).

Why does EWT appear so difficult? Why is it that there are so many interpretations? One reason is that while there are several rules—and these are inviolate—there are many more guidelines. These are just that—guidelines. The guidelines lead to arguments among EWT practitioners. Another reason is that many so-called EWT practitioners don’t seem to have memorized the rules and say things that simply aren’t true. A third reason, as I’ve mentioned before, is that the corrections are devilishly difficult to identify until well after the fact as to what they are and what they mean. While they’re in process they can lead to some strong arguments among practitioners.

Arguing over interpretations of anything on the charts is a valid activity. After all, if one person or theory held the absolute answer then that would be the fountain of youth, Eldorado, and the lost city of Atlantis rolled into one. Wouldn’t all who practiced that theory be lucky? But people that hold strongly to any given theory get extreme in their arguments, often using emotion where reason fails. So you hear such phrases as “I have this on absolute authority from a close relative of Elliott himself who verified it had never been written down and therefore I’m right and you’re not and you’re also stupid.”

Where I find EWT most useful is in gauging market psychology. It supplements my other analysis. I won’t necessarily act on a wave count that seems to be present if it goes against other factors I consider more important.

Briefly, since I don’t have the time to write a treatise on the topic, certain waves are technically strong and have real oomph. Others are not strong at all. Often, such as the B wave I mentioned as a possibility yesterday, they exhibit divergences, non-confirmations and the like.

Getting back to the AUDUSD, I studied charts dating back 30 years yesterday, in an attempt to clear up my confusion over what the pair was doing. I can make a case for three alternative wave counts based on the monthly chart. This is not helpful. One can’t trade this. But it’s a good exercise to write down the reasons for each. Briefly, though, my favored wave count is that we’re in a primary wave two correction (wave one being the steep drop from July, 2008). If this is true then it could retrace most or all of wave one. So it can’t exceed .9851. Since its high yesterday was .8860, this isn’t helpful, either. At least not to me, a small trader, who is not going to buy now, damn the torpedoes, and put a stop quite a distance away. I can make a good case for why I should have gone long at .8590 and stayed in. Had I done that I wouldn’t be doing all this work right now. I didn’t buy but should have doesn’t cut it in trading. Or anywhere else.

So I need to work on a smaller chart, right? Yes. But before leaving the monthly chart I drew an uptrend line from the lows earlier in the decade and it is coming in right about where the pair traded yesterday. Sometimes these old trend lines, once violated, serve as resistance. If I draw a horizontal line back in time to the early 80s on the monthly chart, I also see this is an interesting area known as polarity. Price has roughly used it for support and resistance.

Is it worth a short then? Well this would tie in with my belief we might be in a B wave correction. But there’s a bit of cognitive dissonance here. I’ve been calculating resistance ever since the secondary low in November, 2008. At each key resistance level I dutifully lightened or closed my longs, only to have to find a way to get back in. I’ve been trying to go long since the beginning of September and had some decent trades, e.g. one at 90 pips, but, for the last couple of weeks, have only found short setups where I’ve made small amounts of pips or taken small losses. (I’m not trashing 20 pip profits—they can add up—but one hopes for better than that, usually).

Here’s my opinion. It’s in an uptrend although it seems to be struggling with robust, sustained up moves. It’s at a resistance level that held once, yesterday. I may short it if it reaches .8860 again, depending on the behavior on the charts. Or I may go long if I can find behavior to support that position. That’s the best I can do at this point. Wait and see.

None of the above are trade recommendations. Remember that trading involves substantial risk.

© Dianne Fecteau, 2009. 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.

Uncertainty

AUDUSD—standing aside for now

I’ve been a bit buffeted by the Ozzie during the last several days. I’ve been out at breakeven or tiny little profits in its sideways movements. I stopped out overnight at .8770 with a loss of 48 pips. This morning I took a closer look.

From the longer term charts—monthly, weekly, and daily—we’re still in an uptrend although the movement has been strongly sideways the last couple of weeks. Lately it’s been waffling with ranges, false or premature breakouts from ranges, negative divergences, etc. Now it looks as though it may be pushing up which is what I thought it would do in the first place.

Why, I ask myself, would a pair behave this way? I mean besides the obvious reason that nobody can make up their mind about what to do—is the sky falling or is it not? Maybe that is the reason but what else comes to mind? I think about what Frost and Prechter wrote in their book, Elliott Wave Principle (New Classics Library, 10th ed. 2005), about B waves on page 81:

B waves are phonies…sucker plays, bull traps, speculators’ paradise….[They’re] rarely technically strong, and are virtually always doomed to complete retracement by wave C. If the analyst can easily say to himself, “There’s something wrong with this market,” chances are it’s a B wave.

That’s what I’ve been thinking to myself—there’s something wrong with this market. Of course there may be something wrong with me and my analysis but I’m not going there right now.

OK. What do I have? A belief we’re in an uptrend although Dow Theory tells me it could be an intermediate correction. A market that seems unclear. What choice do I have? I can only stand aside. As Gann wrote, if you “don’t know what to do, there is but one thing to do. Get out and wait until you know there is a definite trend.” When I see something more clearly and have a good entry point, I’ll trade it.

USD/CHF

I’m out of this pair I bought at 1.0288 and have a short on from near the top of the channel at 1.0386. Remember that yesterday I wrote it could bump its head and scoot back to its lower trend line? Well it did. Look at the candles as it approached the top of the channel on the hourly chart:
Now it’s falling out of its channel. Is this a fake move prior to all the news today? (ADP, GDP, Corporate Profits, and CPI). Look at how RSI is dipping. Note the negative divergence. All this is not good. I am, after all, in an overall downtrend as I pointed out yesterday. I’m uncertain here, too, but will stay in the trade until I’m stopped out at profit. Hmm. There seems to be a theme of uncertainty this morning.

EURUSD

I stopped out overnight with 100 pips profit. Not bad, but what’s up with the Euro? I’m analyzing it now and will post later. Hopefully I won’t have to say I’m uncertain, LOL.

GBPUSD

Thank goodness I don’t have to say I’m uncertain! Alas, there’s no trade at the moment. I consider the market to be contracting and I’m waiting to sell, hopefully at or above 1.6150. I’ll post more, later.

None of the above is a trade recommendation. These are just my early morning thoughts. Remember that trading involves substantial risk.

© Dianne Fecteau, 2009. 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.

Is it really Friday?

First, a word cloud based on the text of the FOMC minutes from Wednesday. I hope you had a chance to read the lighthearted take on the minutes I posted a couple of posts ago. This word cloud tells me that their most frequently used words are federal, committee, economic, and markets. Why am I not surprised?

I’m still in the AUD/USD (currently at 78 pips) and USD/CHF (currently at 38 pips) trades from yesterday. The USD/JPY trade stopped out at 20 pips profit. GBP/JPY stopped out at a 40 pip loss and I’m currently short in this pair with my stop at breakeven. Since the AUD/USD and USD/CHF both have stops at a profit point and the GBP/JPY is at breakeven they are “free” trades. Traders love those things because once the stop is at or above breakeven you can't lose money or are profitable. But I’m in these trades thinking bigger things could happen. Whether they will or not is the question.

Today began looking like one of those days when the USD could continue to strengthen. Why? Equity futures are bidding down. Plus there’s lots of buzz and chatter out there about how the equity markets have seen their highs and a turning point is here. Of course some of those buzzing have been saying this for at least six weeks or so, some longer. Much in the area of market prediction is downright silly. That said, I do believe the market provides clues and markers for those alert to them. Seeing them requires awareness, something I’ll write about this weekend.

Ten days ago I did an Elliott wave count on the EUR/USD. I’ve updated it in the daily chart below. The trouble with Elliott Wave is that when you’re in a correction it’s difficult to reach agreement on what it is until after the fact. This makes it less than tradable in most cases. But I do believe it reflects a market psychology. I still believe we’re in wave C of a correction on the daily chart. Once the Euro reached past 1.4720 I put a sell order in at 1.4849. My thinking was that it would reach towards its September ’08 high of 1.4868. It climbed only to 1.4845 so it didn’t quite reach the order. Frankly, I’m a bit surprised. A sell order I put in place this morning at 1.4712 was just triggered. I’ll move my stop to breakeven (if possible—it can reverse quickly but it’s a tight stop so I won’t pay too stiff a price) as soon as it looks as though it’s going to continue down. I won’t be troubled if I’m taken out since there may be one last push up. In any case, the pair is looking a bit top heavy.

Besides that I went long the pound this morning at 1.5987. I don’t have time to include the chart right now but I have a tight stop on it.

None of the above are trade recommendations. Remember that trading involves substantial risk. My hope is that by posting this analysis on some of the trades I take, people can start to learn an approach for themselves. The biggest part of trading is handling emotions and this is something I'll be dealing with in future posts.

© Dianne Fecteau, 2009. 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.

Waiting it out

AUD/USD
Can the market move any slower? Well, yes, I guess it could. My long that I entered yesterday at .8570 has gone up as much as 70 pips but has now fallen back.

I closed half my position at 50 pips and have moved my stop to breakeven. It’s either going to make it up to the top of the range or it won’t. It’s like watching paint dry. But little has changed since my analysis so there’s no reason to do anything else but wait. This situation won’t last forever.

EURUSD

I was stopped out yesterday on the brief move to 1.4653. After looking at the price action on the 15 minute chart I decided to short again. I entered at 1.4632. What made me do so? Remember, I had lightened up on my short position yesterday because of overall bullish sentiment, a slight expansion on the hourly chart, and the fact of triple witching this week which traditionally has resulted in a positive week for the Euro.

Look at the candles on the 15 minute chart below. The upper shadows were long, suggesting that the higher price was being rejected. A gravestone doji formed. This was bearish. The price had rallied, yes, but was dragged down to the low of the 15 minute session. Steve Nison wrote in his book that “the gravestone doji represents the gravestone of the bulls that have died defending their territory.” (Japanese Candlestick Charting Techniques, 2001). There was also divergence between price and RSI. The small triangle represents my entry.

As with the Ozzie, price will not stay in this narrow range forever. Yesterday afternoon I plotted out my interpretation of the Elliott waves on a daily Euro chart which is below. I don’t consider Elliott Wave Theory (EWT) tradable in and of itself but I do believe one can gain insight into the market by looking at it from this viewpoint. The problem of course is that if you have five EWT analysts in a room you usually have six interpretations. One reason this is true is because of the nature of corrections—it’s often hard to see them until well after the fact.

My interpretation is that we’re in a correction known as a zigzag. This is a three wave correction (ABC). EWT involves rules (which are inviolate) and guidelines. The rules for a zigzag are simple and are found in Frost and Prechter’s book, Elliott Wave Principle. First, it always subdivides into 3 waves. I think wave C is forming now, making it the third wave. Second, wave B always subdivides into a ZZ, flat, triangle, or combination thereof. That’s pretty broad, guys, but what I’m labeling B conforms to this. Third, wave B never moves beyond start of wave A which it did not. Finally, wave C always subdivides into an impulse or diagonal. An impulse is five waves up which I’ve labeled with 1 being in March of this year at 1.3740. So, by this interpretation, we’re in the fifth wave up.

Now the question is where might it end? Ha! That’s always the question.

The guidelines for zigzags say wave C is often about the same length as A and usually ends beyond end of wave A. If this is true then we could expect it to end above 1.4720 which is where wave A ended in December of last year. Another guideline says that a line connecting waves A and C is often parallel to a line connecting the end of wave B and the start of wave A. If that’s true then again we’re looking at about 1.4720.
I could buy all this but I think even if it’s true that there is some serious sideways action going on in the Euro (in most pairs actually) and one can make a few pips while it works itself out.

Frost and Prechter also write about the Golden Section. The golden section has to do with how you divide a total length of something. It’s applied to wave theory in that the distance between the start of wave 1 and the bottom of wave 4 will be either .618 or .382 of the whole. You can decide which one by observing how wave five behaves. You need to know whether wave 5 “extends” or not. This is where EWT makes me grind my teeth and clench my jaw. If I have to wait until the end of wave 5 the first question is how will I know it has ended? But never mind that.

I’m going to make an assumption both ways and see what it gets me. If I decide that the distance from the bottom of wave 1 at 1.2456 to the bottom of wave 4 at about 1.38 is only .382 of the whole length, well you can see that the Euro could go up rather sharply to about 1.73. That would be interesting, for sure. If I make the opposite assumption—that .618 of the entire move had already occurred at around 1.38 then the entire move would end at 1.4663. This to me seems very reasonable especially combined with the wishy-washy way the pair has been behaving.

You could say this entire correction isn’t a zigzag at all but a flat. But I’m not going there. For one thing, I have a life to lead. Also, there are other pairs I want to look at.

Remember where I’m at right now. I entered at the top of this little range with a tight stop so the worst that can happen is that I’ll take a small loss. If I take that loss the market is telling me something important and I’ll have better information to base the next trade upon. I can also move to breakeven as it hits the lower part of the range so I’ll have no loss at all if taken out.

GBP/JPY

Yesterday I also want long GBP/JPY. I’ve moved my stop to 60 pips profit. This was a straightforward buy at support after a steep fall. It’s as simple as falling off a log, not that I’ve ever actually fallen off a log. It’s my favorite kind of trade—very small risk because you can set a tight stop and good upside potential. To be honest it’s probably time to start looking at shorting it but I’ll keep you posted. Ranging, sideways markets seem to be the rule right now.

EUR/GBP

Finally, I think the EUR/GBP is interesting. Take a look at my 3 hour, 3 box Point and Figure chart. It consolidated tightly and had a simple quadruple top before breaking out. The many small columns tell me there could be accumulation taking place. It now has drifted back near the breakout point. I’ll study this one further and keep you posted. None of the above is a trade recommendation. All my analysis may well be wrong, wrong, wrong. Trading carries a substantial degree of risk.

© Dianne Fecteau, 2009. 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.