GBPUSD—weekly

I never get a chance to write in this blog as much as I'd like but each weekend I run weekly charts and analyze the daily action for the week past and project what could happen in the week coming up based on the weekly close. This takes a while as there are many analytical approaches to use. I always intend to post these but, as I said, there never seems to be time to do so.

In any case, here's the weekly chart for the GBPUSD that I ran on Saturday. There are a couple of things about it that caught my attention immediately.

First, for the second week in a row, a doji appeared. The long lower shadow hints that lower prices are being rejected and since this was happening near a support area my general "opinion" from this was that there might be a bounce this week. In addition, the close for the week was higher than the close the week before. Thus, I would be predisposed to going long should the opportunity present itself as long as nothing on the shorter term charts looked ominous. This is partly why I went long yesterday.

The second thing that caught my attention was that the RSI readings didn't drop into oversold on the weekly chart. This is not a signal in and of itself. But it seems to indicate that there's enough buyers coming in to keep the pair from plunging.

Unfortunately, on the weekly and daily chart, this pair is in an overall downtrend. So while buying opportunities may present themselves, one needs to be careful.

If you're actually trading off the weekly chart (and I know few day traders who do), your stops must be wider (i.e. below the recent lows of 1.4783 or 1.4872) but of course the potential resistance and price targets are higher. For example, you could use such weekly highs as 1.5822 or 1.6460

Here's the weekly chart printed as of this past Saturday. Were you to look at one printed off today, you'd see a third candle shaping up with a long lower shadow. This won't be confirmed until the close Friday but it suggests that the pair is hammering out a base at the recent lows.
















© 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.

GBPJPY—soaring

My long from 136.40 stopped just above breakeven so I established another long at 136.83 since nothing had changed. I was probably a little too cautious, moving my stop too quickly to breakeven but this happens. In any case, the pair is up nicely, riding the coattails of the pound this morning. I've moved my stop to 137.45 and will just see where it goes. Should the pair pull back to 138.18 (the breakout point from the range), adding to my long is definitely something I'll look at. As I wrote yesterday, 138.09/26 was tough resistance so if it can clear it again, the outlook is good for this pair to climb higher even though it's in an overall downtrend.

Resistance is at 139.00, 140.00, and 141.40, 142.10, and 143.65. Support is at 138.09/18, 136.00, 135.52/45, 135.19, 134.93, 134.00, and 133.92.

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.

GBPUSD—broadening on hourly

I went long early yesterday at 1.5138. The pair climbed after the non-news of the FOMC and reached a high of 1.5337 this morning. It developed a broadening pattern which after a rise can be deadly. While one can make the case for additional gains, I wrote last Friday that the pennant pattern had a potential target of 1.5316 which was near the 2/26 high of 1.5323. That's why I just took partial profits at +170 pips.

The BOE just released its minutes containing the statement, "Some members considered the upside risks to inflation had increased slightly over the month; others felt that the balance of risks had not changed materially." Now there's a statement. They can't decide what the situation is. This, of course, should explain to anyone why the GBPUSD shot to the upside, right?

Support is at 1.5277, 1.5210, 1.5174, and 1.4978. Resistance is at 1.5341 (where it is now at 5:45 AM EST), 1.5520, 1.5415, and 1.5816.

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.

FOMC today

The market hasn't been doing much since about 7:15AM EST, no doubt because of FOMC later today. Nobody seriously expects any change in interest rates but the statement will be scrutinized for hints that interest rates may increase in the future. In any case, don't expect a lot of movement until after it's over.

USDCAD—drifting lower to support

The pair has meandered down close to last week's low of 1.0155. (1.0165 as of 7:22 Am EST). It doesn't seem to be in any hurry to drop so we'll have to see if it finds support there. As I wrote yesterday, the pair may range for a while in between this low and 1.0209. It might be OK to try a small long here at the bottom. There is some positive divergence. We're not talking about a lot of potential pips back up to 1.0209 but the stop can be very tight so the risk-reward ratio is OK. (Don't risk more than 15 or so pips on this trade).

Support is at 1.0155, 1.01, 1.0060, .9819, and .9711. Resistance is 1.0209, 1.0251, 1.0322, 1.0444, and 1.0500.

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.

GBPJPY—update

I took partial profits at +76 pips. It looks like it's successfully clearing 137. If it continues up, then 138.09/26 will be tough resistance. After that, and once it clears the next round number at 139, resistance is at 140.00. Support is at 137.00, 136.00, 135.52/45, 135.19, 134.93, 134.00, and 133.92.

© 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.

GBPJPY—reversed again

This pair, too, is in an upward channel that's a bear flag on the daily chart. The range of that channel appears to be contracting. My short position from 136.58 profit stopped out at +28 pips. When I woke up this morning, I'd missed the low of 135.19 from overnight. However, it looked like a definitive bounce so I went long at 136.40. I'm currently at breakeven with my stop.

While the top of the range is 138.16 (where the pair will find formidable resistance), I actually have potential profit targets for this pair at 145.50/90. That's not to say it will make it, of course. It just hints at possibilities. There is some negative divergence showing up from last week on the three-hour chart so it won't be a straight, easy ride if it does happen. If I'm stopped, I'll probably try again as long as price stays inside the channel.

Resistance is at 137.00 (where it's currently hovering), 138.09/26 (strong), and 140.00. Support is at 136.00, 135.52/45, 135.19, 134.93, 134.00, and 133.92.

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.