EURJPY—soaring

EURJPY has reached a high of 117.27 so far this morning, breaking above a pennant. I have some very attractive price targets for this pair, beginning at 119 and going up to 126 from various methods.

However, be cautious. First, the yen loves bad news—more bad news from Japan's nuclear cleanup efforts could send this pair plummeting. Second, there has been much choppiness over the past two days. This means the market is nervous even though there seems to be better risk appetite this morning.

Note on the daily chart below that the pair hasn't been above 117 since May 2010. This price is parity. It's also at the top of the multi-month rectangle. It would be logical to expect some reaction here and if one wants to go long, waiting for a pullback would be smarter than jumping in at the high.

Resistance is 117.27, 117.60, and 118.27.

Support is at 116.00, 115.54 and 114.57.

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.

EURJPY—still within trading range

Even with the drop to 106.64 yesterday, EURJPY is still within the broad trading range that began last July. Once it touched the low, it immediately pulled back to 110.84 and has since been lingering in a smaller trading range between there and 109.47.

The pair is maintaining the break above the long-term trend line. Momentum, as represented by RSI, looks good. Both of these are positive signs.

Support is at 109.47, 109.27 and 106.64 (big gap there). Given that it bounced so sharply off that low, it's not likely to go back there but it certainly is possible. Resistance is 110.84, 111.97, 112.50, and 113.73. Above that, the pair will probably retest the 116 resistance.

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.

EURJPY—spike high

A shooting star candle spiked at a high of 116.01 on Friday. The pair closed at 115.14, the highest weekly close since May 2010. On the daily chart, the 50 simple moving average (SMA) crossed above the 200 SMA. This is a golden cross. Some see them as bullish. There have been three golden crosses on the daily chart in the last ten years (Fall 2005, May 2008 and May of 2009). The first two were bullish; the last one was for a period of sideways movement before prices headed down. Not much of a sample size from which to draw conclusions. I have price targets that are quite a bit higher in the 119 area. The pair has been in an uptrend since January.

Shooting stars occur when price opens near the low, rises sharply, and then settles near the low. Psychologically, it means the bulls couldn't maintain the highs, in this case because of profit taking when the price climbed above the prior high. This could be signaling a reversal. However, Thursday's candle was bullish and there has been little in the way of upper shadows over the past several days. If this star becomes part of an evening star formation (today's candle would have to close deeply within Thursday's candle), it will be significant. On the daily chart, there is negative divergence.

On the monthly chart I posted last week, I noted the bear flag formation with the upper boundary at 116.14. If price consolidates just below this resistance, expect another attack on it later this week or next week. The lower boundary of the flag is 107.40.

Resistance is at 116.01, 116.88/97, 118.22, 118.73 and 119.23.

Support is at 115.69, 114.85/50, 114.00 and 113.13.

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.

EURJPY—Monthly

There are some notable features on this chart. One is the fact that the pair broke above a long-term trend line. This is positive. It's also worth noting that 105.23 could have been the completion of an ABC pattern and the pair is beginning an impulsive move upwards. Lovely, if true.

Other notable features, though, are darker. RSI is sluggish. The 10-EMA (currently 113.32) seems intent on holding the pair down. February formed a doji candle that could become part of an evening star pattern if March turns out to be a bearish candle that closes well into January's bullish candle. It's likely these three are signaling a correction of some degree. It's also possible the pair is in a bear flag with the upper boundary at 116.14 and the lower one at 107.79).

Monthly support is at 112.25, 110.77, 108.28, 107.79, 106.83 and 105.23. Monthly resistance is at 113.32, 114.24, 115.69 (Oct. high), and 116.14 (the upper boundary of the bear flag).

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.

EURJPY—weakness

One can see that the daily flag hasn't quite panned out. It looks as though EURJPY is correcting but for now the 112 area is holding and has been since the 8th. A break below here targets 111.24 and 110.77 at which point I'd most likely buy. Until that happens, one has to assume a consolidation but a break below both price and RSI on the daily chart suggests lower prices. 115.69 is still the upside number to watch.

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.

EURUSD—at resistance

Euro's overnight low was 1.3637 and that's a support level to watch. The stalling doesn't mean the uptrend is over but a break below that would be significant. To maintain a bullish outlook it needs to break 1.3759/86 and then 1.3860. Since it's hovering around below that resistance, the chances are reasonable that it will make the break.

© Dianne Fecteau, 2010. No part of this material may be reproduced in any form, or referred to in any other publication, without the express written permission of the author.

My purpose in writing this blog is to show you how one trader, me, makes trading decisions and survives while trading Forex. One of the biggest problems I had when I first started trading was trying to apply the “rules” to actual trades. Another was the psychology—limiting losses and letting profits run. If you study my blog, you’ll see how I deal with both those issues. So my writings are not trade recommendations but rather educational in purpose. You have to decide on your own approach to trading. Remember that trading is risky.

EURJPY—broke above triangle

Yesterday I posted the 15-minute chart of EURJPY and it did indeed break out to the long side as expected. I added another position yesterday afternoon at 112.70 in additon to the existing long position at 112.18. In breaking from the triangle, it managed to cut through the resistance zone that was holding it below 112.92 and has reached a high of 114.01 just a few minutes ago.

With the break above the long downtrend line on the weekly chart that I blogged about yesterday, it wouldn't be unreasonable to expect we're in some sort of larger correction and the top of a range that goes back to September 2009 at 115.69 is in sight. After that 116.48 is the .382 retracement of the move down from 170.01. Above that are highs in the 128 and 138/139 area.

However, nothing moves in a straight line. The pair has exceeded the target for the triangle at 113.50; it's overbought on 15-minute and one-hour charts. There's also a rounding on the top of the 15-minute chart that hints at traders taking profits. So it wouldn't be unreasonable to see some sort of pullback.

If the pair begins to break down, support is at 113.50, 112.92, 111.83, 111.25, 110.32, and 109.59/52 (price low and fib). Below that would hint at 106.83 and of course below 105.43 would resume the larger downtrend. I will probably add to my positions on a pullback.

Here's the 15-minute chart:












© Dianne Fecteau, 2010. No part of this material may be reproduced in any form, or referred to in any other publication, without the express written permission of the author.

My purpose in writing this blog is to show you how one trader, me, makes trading decisions and survives while trading Forex. One of the biggest problems I had when I first started trading was trying to apply the “rules” to actual trades. Another was the psychology—limiting losses and letting profits run. If you study my blog, you’ll see how I deal with both those issues. So my writings are not trade recommendations but rather educational in purpose. You have to decide on your own approach to trading. Remember that trading is risky.

EURJPY—triangle

On the 15-minute chart of EURJPY below one can see it in a symmetrical triangle. From an Elliott Wave perspective, the breakout should be to the upside. I don't trade such short-term charts but I'm already long from 112.18 and I check the shorter-term charts periodically to see if there are any signals that support or negate my positions or that give clues about pullbacks. In any case, as I wrote in the blog post a few minutes ago, there's lots of resistance to get through up to 112.92 so let's see what happens.

Here's the 15-minute chart:












© Dianne Fecteau, 2010. No part of this material may be reproduced in any form, or referred to in any other publication, without the express written permission of the author.

My purpose in writing this blog is to show you how one trader, me, makes trading decisions and survives while trading Forex. One of the biggest problems I had when I first started trading was trying to apply the “rules” to actual trades. Another was the psychology—limiting losses and letting profits run. If you study my blog, you’ll see how I deal with both those issues. So my writings are not trade recommendations but rather educational in purpose. You have to decide on your own approach to trading. Remember that trading is risky.

EURJPY—weekly

EURJPY is another pair that has closed above a long-term trend line. The low is more recent than the Guppy's was (Aug. 2010 versus Jan. 2009 for the Guppy). However, until the pair breaks below the 105.43 low, it's possible this swing low was one to build a base upon.

This pair may be being pulled by the Euro's move up as there's an 80% correlation on a daily basis currently. As I blogged earlier this week, there's fierce resistance in the 112 zone, all the way up to 112.92. In additon, 115.69 is the top of a general range that goes back to September 2009. 116.48 is the .382 retracement of the move down from 170.01. Above that are highs in the 128 and 138/139 area.

If the pair begins to break down, support is at 111.83, 111.25, 110.32, and 109.59/52 (price low and fib). Below that would hint at 106.83 and of course below 105.43 would resume the larger downtrend.

Here's the weekly chart:











© Dianne Fecteau, 2010. No part of this material may be reproduced in any form, or referred to in any other publication, without the express written permission of the author.

My purpose in writing this blog is to show you how one trader, me, makes trading decisions and survives while trading Forex. One of the biggest problems I had when I first started trading was trying to apply the “rules” to actual trades. Another was the psychology—limiting losses and letting profits run. If you study my blog, you’ll see how I deal with both those issues. So my writings are not trade recommendations but rather educational in purpose. You have to decide on your own approach to trading. Remember that trading is risky.

EURJPY—nudging above resistance

All the Euro crosses are nudging up this morning, following the Euro and this pair is no exception, reaching a high of 112.77 so far this morning, just above last week's high of 112.50. The weekly close was at 112.47 so bulls have control. I'm long from 111.89.

As long as the pair can keep nudging higher and get above the potential C wave target of 112.92 (.618A) as well as fib, MA and price resistance in this area (big resistance), I don't see any real resistance until 113.71/114.00, a weekly downtrend line from October, price target, and a round number. After that is 115.66, 116.09, and 116.68.

© Dianne Fecteau, 2010. No part of this material may be reproduced in any form, or referred to in any other publication, without the express written permission of the author.

My purpose in writing this blog is to show you how one trader, me, makes trading decisions and survives while trading Forex. One of the biggest problems I had when I first started trading was trying to apply the “rules” to actual trades. Another was the psychology—limiting losses and letting profits run. If you study my blog, you’ll see how I deal with both those issues. So my writings are not trade recommendations but rather educational in purpose. You have to decide on your own approach to trading. Remember that trading is risky.

EURJPY Hourly Chart

Here's the hourly chart I was talking about in my last post. The only thing I didn't mention was the negative divergenge.

EURJPY—rally

I'm out of the remainder of my long from 109.85 at 110.30 yesterday (+45 pips) when it looked as though the pair might fail at resistance. It hasn't gotten above 111.16 but this rise technically invalidated the daily evening star since that high was 110.99.

The C leg of the ABC targeted 111.09 (1.618A) so we're right in the vicinity of that and we're also at confluence.

Two things jump out at me on the hourly chart. First, the pair has been in a sideways consolidation since 8AM EST yesterday morning. It's a fairly narrow rectangle of 97 pips (111.16/110.19) and when prices hover in a narrow band such as this just above or below resistance it's often a bullish sign because demand (buying) is enough to prevent a retracement. If it does break upward, the target is 112.13.

The other thing that jumps out is the look of a triangle forming which in Eliott Wave speak would break upwards. In classical technical analysis the triangle is often a continuation move. The top of the triangle is 111.24 from which it could break upward to target 112.54. This is close to resistance consisting of price highs, fibs, and the 200 MA at 112.43. Beyond that, within the upward sloping channel, there are targets of 113.04 and 113.78.

On the downside the support remains at 109.85, 109.58, 1.0895 (prior resistance), 108.50 and 108.00. Below that is a zone of support from 107.86 down to 106.83, then 106.24 and 105.83.

I'll post a chart later.

© Dianne Fecteau, 2010. No part of this material may be reproduced in any form, or referred to in any other publication, without the express written permission of the author.

My purpose in writing this blog is to show you how one trader, me, makes trading decisions and survives while trading Forex. One of the biggest problems I had when I first started trading was trying to apply the “rules” to actual trades. Another was the psychology—limiting losses and letting profits run. If you study my blog, you’ll see how I deal with both those issues. So my writings are not trade recommendations but rather educational in purpose. You have to decide on your own approach to trading. Remember that trading is risky.

EURJPY—rallying to resistance

Instead of waiting for the rally, I decided to go long yesterday at 109.85 when it looked as though the 109.58, hammer low would hold. It was accompanied by an RSI failure swing on the hourly chart.

Now, though, it has rallied to resistance and I took much of the trade off the table for +80 pips. I've been interested in shorting this pair since last week. On the daily chart, Friday was a hanging man candle (spike high of 110.99) and yesterday was a bearish engulfing candle for an evening star formation. This suggests a drop is at hand. If the pair closes above 110.99, the evening star will be invalidated.

I've been analyzing this as an ABC correction with the C leg targeting 111.09 or 1.618 of the A leg. 110.99 was pretty close. Its high so far this morning is 110.78 and the last closed, hourly candle had an upper shadow. This hints the higher prices are being rejected. The angle of ascent is also very steep. I'm almost ready to reverse and go short. If I'm wrong, my stop can be tight and it won't eat up all the profits of the long trade I'm in.

Support is at 109.85, 109.58, 1.0895 (prior resistance), 108.50 and 108.00. Below that is a zone of support from 107.86 down to 106.83, then 106.24 and 105.83. If the pair manages a close above 111.24/33, there's resistance at 111.68/97, 112.52 from the 200 daily SMA and 112.20/44.

Here's the hourly chart:











© Dianne Fecteau, 2010. No part of this material may be reproduced in any form, or referred to in any other publication, without the express written permission of the author.

My purpose in writing this blog is to show you how one trader, me, makes trading decisions and survives while trading Forex. One of the biggest problems I had when I first started trading was trying to apply the “rules” to actual trades. Another was the psychology—limiting losses and letting profits run. If you study my blog, you’ll see how I deal with both those issues. So my writings are not trade recommendations but rather educational in purpose. You have to decide on your own approach to trading. Remember that trading is risky.

EURJPY—dropping

I missed the short in this pair as it happened late Friday and I didn't analyze the pair over the weekend where I might have gotten in earlier today. This happens—some trades get away. However, it may retest the high.

When I wrote last week about this being the C leg of an ABC correction, I wrote that the potential for 1.618 of the A leg was 111.09. The pair reached 110.99 before falling. On the hourly chart, there's a low this morning of 109.58. This was a hammer candle and support should hold. A close below targets 1.0895 (prior resistance) and then 108.50 and 108.00. Below that is a zone of support from 107.86 down to 106.83, then 106.24 and 105.83.

Resistance is 110.00, 110.99, and 111.68/97 (strong).

I'll watch for a rally in this pair.

© Dianne Fecteau, 2010. No part of this material may be reproduced in any form, or referred to in any other publication, without the express written permission of the author.

My purpose in writing this blog is to show you how one trader, me, makes trading decisions and survives while trading Forex. One of the biggest problems I had when I first started trading was trying to apply the “rules” to actual trades. Another was the psychology—limiting losses and letting profits run. If you study my blog, you’ll see how I deal with both those issues. So my writings are not trade recommendations but rather educational in purpose. You have to decide on your own approach to trading. Remember that trading is risky.

EURJPY—C leg correction

EURJPY has touched a high of 110.24, its prior high. It looks very strong as it surged through the fibo confluence and resistance at 108.95 and 109.50. If this is a correction then the C leg will reach 111.09 (assuming C is 1.618 A's length).

It's possible the pair will retest 109.00 or 109.50. Depending on how strong it looks on the hourly chart, I'll probably buy. Below that support is at 108.00, 107.86, 106.83, and 106.24.

© Dianne Fecteau, 2010. No part of this material may be reproduced in any form, or referred to in any other publication, without the express written permission of the author.

My purpose in writing this blog is to show you how one trader, me, makes trading decisions and survives while trading Forex. One of the biggest problems I had when I first started trading was trying to apply the “rules” to actual trades. Another was the psychology—limiting losses and letting profits run. If you study my blog, you’ll see how I deal with both those issues. So my writings are not trade recommendations but rather educational in purpose. You have to decide on your own approach to trading. Remember that trading is risky.

EURJPY—correcting

The remainder of my short from 109.27 was profit-stopped out at 108.20 (+107 pips).

The high so far has been 108.73. This is just above 50% of the most recent move down from 110.24 to 106.83. I wrote yesterday about price targets ranging from 108.46 (if this C leg on the three-hour chart was .618 of A), 109.46 if C equals A, and 111.09 if C is 1.618 A's length. There is fibo confluence at 108.95. My plan is to reestablish a short positon as this should prove to be good resistance up to 109. However, the pair is exhibiting good momentum at this point and price and time are fairly well in synch so I'm waiting to see some signs of weakness.

Support is a zone from 107.86 to 106.83, and 106.24 (price lows, polarity, fib confluence). Below that is 105.83 (September lows) and 103.81.

© Dianne Fecteau, 2010. No part of this material may be reproduced in any form, or referred to in any other publication, without the express written permission of the author.

My purpose in writing this blog is to show you how one trader, me, makes trading decisions and survives while trading Forex. One of the biggest problems I had when I first started trading was trying to apply the “rules” to actual trades. Another was the psychology—limiting losses and letting profits run. If you study my blog, you’ll see how I deal with both those issues. So my writings are not trade recommendations but rather educational in purpose. You have to decide on your own approach to trading. Remember that trading is risky.

EURJPY—possible ABC correction

EURJPY has managed to stay above its low of 106.83, near a somewhat obscure fibo and near a round number (which the yen pairs seem to favor). On the daily chart (not shown), there was a harami candle yesterday which hints the market is vacillating. I'm still short from 109.27. I took partial profits at 160 pips just a few minutes ago.

The pair hasn't managed to get above 107.87 in what looks like an ABC correction on the three-hour chart. The A wave of this ran from 107.61 to 110.24 or 263 pips. From the 106.83 low, this means a target of 108.46 if C equals .618 of A, 109.46 if C equals A, and 111.09 if C is 1.618 A's length. I think 108.46 is most likely which is also near fibo confluence of 108.95. I'd probably re-establish a short position there as my profit stop would have been hit on my current short position. As I wrote yesterday, there's a cluster of resistance up to 109.00.

A support zone exists down to 106.24 (price lows, polarity, fib confluence). Below that is 105.83 (September lows) and 103.81.

Here's the three-hour chart:












© Dianne Fecteau, 2010. No part of this material may be reproduced in any form, or referred to in any other publication, without the express written permission of the author.

My purpose in writing this blog is to show you how one trader, me, makes trading decisions and survives while trading Forex. One of the biggest problems I had when I first started trading was trying to apply the “rules” to actual trades. Another was the psychology—limiting losses and letting profits run. If you study my blog, you’ll see how I deal with both those issues. So my writings are not trade recommendations but rather educational in purpose. You have to decide on your own approach to trading. Remember that trading is risky.

EURJPY—trying to base at support

EURJPY failed to form a base in the low 108 area and dropped further to a low of 106.95 on Friday, near a somewhat obscure fibo and of course a round number (which the yen pairs seem to favor). In trying to base here, it has reached a spike high of 107.68 overnight. However it has since fallen back and we're going to have to see what happens during the NorAm session.

A support zone exists down to 106.24 (price lows, polarity, fib confluence). Below that opens up the possibility of a move down to 103.81. There's a cluster of resistance between 108.00 and 109.00 (price, fibo, confluence). Above that is last week's high of of 110.24.

See last week's blog posts for charts.

© Dianne Fecteau, 2010. No part of this material may be reproduced in any form, or referred to in any other publication, without the express written permission of the author.

My purpose in writing this blog is to show you how one trader, me, makes trading decisions and survives while trading Forex. One of the biggest problems I had when I first started trading was trying to apply the “rules” to actual trades. Another was the psychology—limiting losses and letting profits run. If you study my blog, you’ll see how I deal with both those issues. So my writings are not trade recommendations but rather educational in purpose. You have to decide on your own approach to trading. Remember that trading is risky.

EURJPY—down to 108.11

EURJPY dropped to a low of 108.11 over the last two hours but it needs to go lower than this.

Looking again at the hourly chart, one can see it forming a triangle or possibly an asymmetrical head and shoulders pattern (which would not be confirmed until it broke below 107.80). It also may be in a zigzag flat correction with the C leg yet to begin. If a C leg began after the 108.11 low, price could reach to 110.15 to a high of 112.78 (C = 1.618 A).

Here's the hourly chart:

© Dianne Fecteau, 2010. No part of this material may be reproduced in any form, or referred to in any other publication, without the express written permission of the author.

My purpose in writing this blog is to show you how one trader, me, makes trading decisions and survives while trading Forex. One of the biggest problems I had when I first started trading was trying to apply the “rules” to actual trades. Another was the psychology—limiting losses and letting profits run. If you study my blog, you’ll see how I deal with both those issues. So my writings are not trade recommendations but rather educational in purpose. You have to decide on your own approach to trading. Remember that trading is risky.

USDCHF—Narrow range

I have two long positions—one from .9338 and one from .9490. I took partial profits on the former at +325 pips.

Since eight yesterday morning, the pair has been in a narrow 74-pip range, along with EURCHF, EURJPY, GBPJPY, USDJPY and USDTRY. This is hinting at market uncertainty for all currencies vis-à-vis the yen and the Swiss Franc. We'll have to wait and see.

© Dianne Fecteau, 2010. No part of this material may be reproduced in any form, or referred to in any other publication, without the express written permission of the author.

My purpose in writing this blog is to show you how one trader, me, makes trading decisions and survives while trading Forex. One of the biggest problems I had when I first started trading was trying to apply the “rules” to actual trades. Another was the psychology—limiting losses and letting profits run. If you study my blog, you’ll see how I deal with both those issues. So my writings are not trade recommendations but rather educational in purpose. You have to decide on your own approach to trading. Remember that trading is risky.