GBPJPY—weak and somewhat directionless

My remaining short from 137.96 profit-stopped out at 136.26 for +170 pips.

I just shorted again at 135.81. I would have preferred to have shorted somewhat higher but I missed the high last evening (EST) of 136.55.

The reasons I shorted are that the pair is in an overall downtrend, I was far enough above the longer term uptrend support line to make a reasonable profit even if it wasn't penetrated, and there's a slight broadening pattern on the hourly chart that suggests to me lower prices may be in store. In addition, momentum doesn't appear to be supportive of higher prices.

If you consider that the upward channel on the daily chart could be construed as a bear flag, a price target can be calculated at 129.05. It may not make it but this isn't out of range with other price targets I've calculated for this pair since late 2009. However, it must break 134.30/53 for this to be viable. It's not a sure thing it will do this. For one thing, there are hammers forming on the hourly chart, signaling that the pair may be trying to "hammer" out a bottom. In general, though, the pair is somewhat directionless right now. It will find its way eventually.

Resistance is at 136.55, 136.92 (strong), 137.50 and 138.42. Support is at 135.19, 134.53 (strong), 133.93 and 132.03.

Here's the one-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.

AUDUSD—update

My short position from .9240 profit stopped out at .9182 for +58 pips as the pair reached a high of .9184. It has stalled in this resistance zone. If it gets through here it will encounter additional resistance at .9230, .9252, .9330, and .9406. Support is at .9159, .9096/85, .9054, .9001, .8888. I intend to short rallies, especially if the pair can get
to .9230/52.

© 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—drop below short-term uptrend line

This pair just dropped to a low of 134.72, suggesting that it's going to be difficult for any kind of serious rally to take place. I just took partial profits on my short from 137.96 at +309 pips. Shorting rallies is the best approach, especially since the weekly chart shows the long term uptrend line coming in at 134.30. However a clean break below that line would hint much lower lows are in store. Keep the weekly chart in mind while trading shorter time frames.

Resistance is in narrow increments at 1.3562, 1.3596, 136.20, 136.50, 137.00, 137.50 and 137.95. Support is at 134.30, 133.93 and 132.03.

Here's the weekly chart. My short doesn't show on this chart because I use a different charting package for longer-term 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.

EURUSD—sitting on support

Euro is sitting on support with a low of 1.3499 so far today. The fact that it has slowed shows some buying has come in at the psychological level of 1.35. Fine. Let it. With bullish divergence on the hourly chart, it might stage a rally. However, it's doubtful that rally will be very robust with all the negative sentiment around the Euro. In addition, cycle calculations as well as other price target calculations are coming in at the 1.27 to 1.30 price levels.

My short from 1.3686 is still on, of course and I will add additional short positions on any rallies as long as the price action doesn't indicate a change in trend.

Support is at 1.3499, 1.3435, 1.3405, 1.3263, 1.3209, and 130.00. Resistance is at 1.3538, 1.3557/62 (strong), 1.3610, 1.3623/33, and 1.3674.

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.

GBPUSD—rally

Following the positive divergence on the hourly chart on Friday, the pair has managed a rally which so far has only reached a high of 1.5013. The pair has also formed what's known as an ascending triangle from which a breakout is usually upward. However, GBPUSD is generally weak. My short from Friday at 1.5153 is still on and is profit stopped at 1.5052.

If this rally can get any legs, one would expect to see the pair break 1.5052 in a sassy, confident fashion. I'm a bit skeptical but will follow the market and reverse, if need be, at that point.

Resistance is at 1.5013, 1.5033, 1.5120, 1.5153 (strong), 1.5254, 1.5328, and 1.5382. Support is at 1.4964, 1.4932, 1.4873, 1.4853 (strong), 1.4873 and 1.4814.

Here's the one-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.

USDCAD—rallying

USDCAD may have hit a bottom last week at 1.0061. I took a long position on Friday at 1.0115 and so far, so good. There's still a lot of sentiment against the USD vis-à-vis the Loonie but I'm stopped better than breakeven at this point. It did almost take me out before rallying because I had identified support at 1.0060 and my stop was just below that.

Friday showed what is known as a key day reversal bar. This is when the low was lower than the prior day's low but the close was higher than the prior day's close. In the case of USDCAD, the low on Friday was 1.0061 compared to Thursday's low of 1.0090 and Friday's close was 1.0173 compared to Thursday's close of 1.0163. While I found that encouraging, I had already bought at that point. My reasons for doing so were the strength of the nearby support and some patterns on the shorter time frame charts.

In any case, this pair is not out of the woods by any means. Support is at 1.0155, 1.0116, 1.0090, and 1.0071/61. Resistance is at 1.0186/89 (strong), 1.0232, 1.0322, and 1.0443.

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.

AUDUSD—weak

AUDUSD is weak this morning going into my trading day but currently the pair isn't much lower than it was on Friday when I took partial profits. My short position at .9240 is still on with a profit stop in place.

Its low so far has been .9106 and its stalling which makes sense given the support levels that are in place. I'd expect tough support down to .9054. A break below that would be fairly clear until .9001 where the pair would again run into strong support. The market appears somewhat risk averse this morning so further drops might happen. Continuing to short on rallies seems to be the way to go but a confident close above .9180 would, of course, change things to a less bearish outlook.

This pair is still in an overall uptrend from late 2008 lows. That won't change until it breaks .7164 but there's a lot of ground between here and there and profits are possible.

Support is at .9106, .9096, .9076, .9054, .9001, .8888,.8760, and .8451. Resistance is at .9137, 9156/70, .9230, .9252, .9330, and .9406.

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.