AUDUSD—lower high yesterday

The remainder of my long from .9841 profit stopped (barely) at +10 pips.

Topping out at .9958 yesterday, the pair has since fallen just below its short-term uptrend line from August 25th at .9754. This means last week's very short-lived spike high of 1.0003 still stands. Best to watch behavior off this uptrend line. If it and the RSI uptrend line hold then that signifies some latent strength. A retest of the upper channel line at .9909 might offer a shorting possibility. On the other hand, the pair is working out its negative divergences on the shorter-term charts so don't write it off yet.

Support can be found at .9754, .9709, and the real line in the sand of .9542. Resistance is at .9845, .9909, .9958 and 1.0003.

Here's a daily 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—approaching uptrend line

Cable is approaching its uptrend line at 1.5712 and a break of this would be significant. First, there's certainly a good case to be made for an ABC correction being in place. If so, last week's 1.6107 high marked the end of it. I'm still thinking that was too short (.618 of the A wave would have been 1.6391 and the bull flag had a target of 1.6461) but the market will tell. Certainly a break of the uptrend line along with a break of the RSI uptrend line on the daily chart would signal there may be more lows in the works. At that point I'd look for a short.

1.5670 is the 9/30 low and 1.5627 is a former daily speed line that the pair broke above. Then there's the psychological 1.55, below which is probably a return to 1.5297. If the pair rallies, expect resistance at 1.5997 and 1.6107.

Here's the daily 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.

EURGBP—weekly

The reason I'm showing this chart is not because I'm trading it but rather because it shows how even after spinning tops and upper shadows on candles, a pair can still move higher. Which is what happened. Now it's true it's approaching the high of the upper shadow on last week's candle, .8842. What happens here will be significant for the pair and may signal that the advance has gone a bit too far. It's even possible the pair will drop back to .8715, .8600 or its break of key resistance at .8531. At that point it would certainly be an attractive candidate for going long, depending on what else is going on. However, if it overcomes the high of .8842 (a close above it), then .8888 is confluence on the daily chart and .9000 is a big psychological number.

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.

EURUSD—weak

Euro reached a low of 1.3831 yesterday and bounced to a high of 1.4004 where it has faltered again. I decided to short this morning at 1.3937. There has been enough weakness lately with the broken trend lines and divergence, along with the more tentative nature of the candles (i.e. last week's weekly candle of a spinning top and daily candles with upper shadows) that the earlier price targets around 1.40/41 look reasonable. So a correction appears under way. Euro bulls are trying to hang on and the price is currently hovering around the .618 retracement level of the drop from last November through June of this year.

Support is at 1.3775 (a prior 4th wave), 1.3750, 1.3630, 1.3500, and 1.3335. At that point, buyers will most likely come in with sufficient numbers to provide a base and longs can come back into play. In any case, that's my outside target for now. My interim target is 1.35 to 1.3630. If the pair manages to recover on this current skimpy correction (with a low of 1.3831), look for a clean break (a close) above 1.4004 first and then last week's 1.4159 high. If it closes above both of those I will consider the highs I hypothesized about the last couple of weeks within reach.

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.

USD Index--Monthly

When I ran the monthly chart this past Saturday, the index had just about touched its monthly uptrend line. One should see a bounce from the touch and given the behavior of some of the dollar pairs I think it's more likely than not.

There's still all that negative dollar sentiment and the Fed is sure to continue its less than effective quantitative easing. Have you ever seen a market bounce in those doomsday conditions? I have. Stay tuned. If the index begins to approach 78, there may in fact be a decent rally, at least up to the top of the symmetrical triangle.

Here's the monthly 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—another attempt at the top

I'm long from .9841 and I took some partial profits at +60 pips.

Last week's high of 1.0003 was very short-lived—a quick spike at 8:15AM EST on Friday morning. That was still a 7th week with a higher high and higher low than the prior week and in only one of those seven weeks (the week before last) was there a quick lower low. So it's not enough to say the uptrend is over yet and I'd expect another test of parity. Another failure to close above parity would not be positive. The fact that it broke below a reasonably drawn uptrend channel is not good. A retest of that channel line is 1.0065 and since potential price targets are at that level from last week, it would probably present a short opportunity. There is negative divergence on the three-hour chart.

Support can be found at .9801, .9767, .9709, and the real line in the sand of .9542.

Here's a 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.

EURUSD—breaking below trend lines

You can see on the daily chart how Euro has broken two uptrend lines. It needs to hold on to this one. Dropping below 1.3830 will tarnish the bullish case. In Elliott Wave terms, a drop below 1.3775 (a prior 4th wave) would also communicate that things are no longer going well. Potential targets below that include 1.3750, 1.3630, 1.3500, and 1.3335. At that point, buyers will probably pile in unless the longer term downtrend has taken off in seriousness.

The weekly chart (not shown) had a spinning top last week which at best represents indecision and may be the signal the downtrend is resuming. That said, this correction is necessary. The pair may well make another push up. But it couldn't continue to do so at this steep angle of ascent and with the seriously overbought condition. Working its way lower would be a plus to the bulls as it would let it build energy for another upward push. My bias is still short but the fact is that the trend up has been strong. I will probably short if it breaks 1.3830/1.3775.

Here's the daily 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.