I don’t trade much on the last day of the month anymore as I try to use my time to get ready for the coming month by analyzing monthly charts, etc. I also don’t feel like giving back any of my monthly profits.
However, I just noticed that EURUSD dropped to a weekly pivot resistance level of 1.3791 before stalling. I don't use pivots by themselves and because it didn't correlate with much else in the way of support this morning I didn't consider it particularly relevant. But the stalling at that price is interesting. It's also just below the .382 retracement of the most recent move up from 1.3712. I might risk buying at the .5 level of 1.3782, maybe a bit higher, if momentum looked favorable on the short-term chart. However, a stronger retracement would be more appealing.
© 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—aiming high
EURUSD has continued to climb, reaching a high of 1.3848 so far this morning. Eyes are on the the February 1st high of 1.3862. It's too close to not get there so let's look at some resistance levels.
1.3881 is the first one. It's .618 of the entire move from 1.5144 down to 1.1892 and also the target of the daily flagpole that formed between the 10th and 16th of January. It's also the location of a speedline from from the 1.2874 low and obviously close to the prior high but just enough beyond it to lure in long breakout buyers.
The second possible resistance is a zone between 1.3993 and 1.4042. This is comprised of an uptrend line from the 10th of January and the downtrend line from November 2009. There's also a speed line coming in here from the 1.1902 low.
Finally, if you assume an upward march the next few weeks, Euro will hit the downtrend line from the 1.6041, 2008 high around 1.4317. If you further assume that the price action on the weekly chart is an ABC wave with the C wave currently in progress, then .618 of the A wave would bring price to 1.4347.
So that's three resistance levels, all of which will probably engender some selling so bulls can get in on a retracement and bears can suspect it's the beginning of a wave five down on the weekly chart. An interesting point if it is wave five is that it cannot be longer than 3,276 pips because if it was it would exceed the length of wave three. Since wave one was 3,712 pips and the Elliott hard and fast rule is that wave three cannot be the shortest, you can do some interesting calculations with the golden section to gather probabilities of where the current weekly wave four is going to end. I'll let you do them if you're interested rather than just provide them.
By the way, if it doesn't make it past 1.3862/81 and significant selling comes in, it's bearish. The pair stalled below 1.3862 last week and didn't manage to close over 1.38 which the bulls would have preferred to see. This would most likely result in a failure swing for RSI on the hourly chart.
Support is at 1.3705, 1.3685 (fib confluence), 1.3640, 1.3594, 1.3524, and 1.3429, the low for February.
© 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.
1.3881 is the first one. It's .618 of the entire move from 1.5144 down to 1.1892 and also the target of the daily flagpole that formed between the 10th and 16th of January. It's also the location of a speedline from from the 1.2874 low and obviously close to the prior high but just enough beyond it to lure in long breakout buyers.
The second possible resistance is a zone between 1.3993 and 1.4042. This is comprised of an uptrend line from the 10th of January and the downtrend line from November 2009. There's also a speed line coming in here from the 1.1902 low.
Finally, if you assume an upward march the next few weeks, Euro will hit the downtrend line from the 1.6041, 2008 high around 1.4317. If you further assume that the price action on the weekly chart is an ABC wave with the C wave currently in progress, then .618 of the A wave would bring price to 1.4347.
So that's three resistance levels, all of which will probably engender some selling so bulls can get in on a retracement and bears can suspect it's the beginning of a wave five down on the weekly chart. An interesting point if it is wave five is that it cannot be longer than 3,276 pips because if it was it would exceed the length of wave three. Since wave one was 3,712 pips and the Elliott hard and fast rule is that wave three cannot be the shortest, you can do some interesting calculations with the golden section to gather probabilities of where the current weekly wave four is going to end. I'll let you do them if you're interested rather than just provide them.
By the way, if it doesn't make it past 1.3862/81 and significant selling comes in, it's bearish. The pair stalled below 1.3862 last week and didn't manage to close over 1.38 which the bulls would have preferred to see. This would most likely result in a failure swing for RSI on the hourly chart.
Support is at 1.3705, 1.3685 (fib confluence), 1.3640, 1.3594, 1.3524, and 1.3429, the low for February.
© 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.
Currency market today
Friday, February 25, 2011
In a recap of the week so far as of 9:30AM EST:
AUDUSD has moved from a low of .9968 on Tuesday to a high of 1.0152 so far today, the highest price since last Friday's 1.0058. While price action has been choppy this week, the pair has managed to stay above parity for the most part. There have been only two closes below parity the entire month. The current price action is at resistance but should it make it through, next resistance is at 1.0200 and then of course 1.0257. Beyond that, one can assume that the longer-term uptrend is resuming. Only below .9804 would the bears begin to get excited and below .9537, there'd be blood in the streets. Obviously, the pair is well above those levels despite bearish candle formations on the longer-term charts.
EURGBP reached a high of .8593 this morning, its highest high since February 1. Beyond this is resistance at .8649/72, .8818 and .8941. On the daily chart, this could be shaping into a triple top (.8649 on 12/31; .8672 on 1/26). However, confirmation of the triple top won't come until price drops below .8285, quite a ways down and with some good support in the way. Nearest support is .8531 and .8500.
EURJPY is in a corrective pattern and yesterday formed a doji candle with a low of 112.20. This pushed it below the 10- and 20-day moving averages. It's still above the 50-, 100-, and 200-day averages and above the long-term downtrend line on the weekly chart. However, bulls are waiting on moves above 115.69 in the short-term and then 119.66. On the downside, 106.83 and 105.44 are the support levels to watch as a close below would signal resumption of the longer-term downtrend. Near-term support is quite a bit above those numbers at 111.24, 110.77 and 109.58.
EURUSD really needs to climb above the February 1st high of 1.3862. It's trying. The high yesterday was 1.3838. A close above 1.38 this week would be bullish. 1.3700 is the first support level to watch—the low so far this morning has been 1.3743. After that is 1.3650 and then 1.3594, 1.3524, and 1.3429, the low for the month. Obviously, bulls are hoping to see 1.40 sometime soon. Next week's price action should be interesting.
GBPJPY is still above a long-term monthly downtrend line but has dipped below the 200-day moving average today with a low, so far, of 131.38. The low for the month was 1.3091 on February 1st. This week has seen choppy price action in many pairs and this one is no different. The pair made a new high last week at 135.54 so there is bullish price behavior to contend with even though the pair is currently correcting. I'd expect 129.25 to contain the correction (.618 of the move up from 125.51) and before that is the prior swing low at 129.52. Resistance is at 135.54, 136.24, and 137.79.
GBPUSD has had a higher close each week this month and this is bullish as long as it holds above 1.5963. However, there's a potential for a double top formation with the high of 1.6300 in early November and the high of 1.6282 in early February. The high this week has been 1.6276. There is no confirmation of the potential double top until price broke below 1.5345, quite a ways below here. If cable can maintain its bullish behavior, expect to see 1.6300, 1.6461 and 1.6878.
USDCAD continues to sink. The low so far this morning is .9796. Support is at .9771 and then .9711, the 2008 low. Below that there's not a lot stopping it until it reaches .9417. The triangle price target was .9549. The only good thing you can say is that if you want to try a long position, the stop can be very tight. Resistance is at .9960 and 1.0058.
USDCHF is another suffering pair with a low yesterday of .9234. This has broken below most reasonable projections of support. I prepared charts earlier this year that show it could get to 90 and it seems to be on its way. The weekly high was .9506. One needs to see a move above that to believe it's recovering but until it can climb above .9784, there's not a lot to say.
USDJPY: The month's high was 83.97, reached the 16th and the pair has been dropping since then with a low so far this morning of 81.66. This is near key support at 81.35. Below this is 81.10 and 80.24. 83.91 is likely to be resistance, the downtrend line of the monthly wedge pattern.
© 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.
AUDUSD has moved from a low of .9968 on Tuesday to a high of 1.0152 so far today, the highest price since last Friday's 1.0058. While price action has been choppy this week, the pair has managed to stay above parity for the most part. There have been only two closes below parity the entire month. The current price action is at resistance but should it make it through, next resistance is at 1.0200 and then of course 1.0257. Beyond that, one can assume that the longer-term uptrend is resuming. Only below .9804 would the bears begin to get excited and below .9537, there'd be blood in the streets. Obviously, the pair is well above those levels despite bearish candle formations on the longer-term charts.
EURGBP reached a high of .8593 this morning, its highest high since February 1. Beyond this is resistance at .8649/72, .8818 and .8941. On the daily chart, this could be shaping into a triple top (.8649 on 12/31; .8672 on 1/26). However, confirmation of the triple top won't come until price drops below .8285, quite a ways down and with some good support in the way. Nearest support is .8531 and .8500.
EURJPY is in a corrective pattern and yesterday formed a doji candle with a low of 112.20. This pushed it below the 10- and 20-day moving averages. It's still above the 50-, 100-, and 200-day averages and above the long-term downtrend line on the weekly chart. However, bulls are waiting on moves above 115.69 in the short-term and then 119.66. On the downside, 106.83 and 105.44 are the support levels to watch as a close below would signal resumption of the longer-term downtrend. Near-term support is quite a bit above those numbers at 111.24, 110.77 and 109.58.
EURUSD really needs to climb above the February 1st high of 1.3862. It's trying. The high yesterday was 1.3838. A close above 1.38 this week would be bullish. 1.3700 is the first support level to watch—the low so far this morning has been 1.3743. After that is 1.3650 and then 1.3594, 1.3524, and 1.3429, the low for the month. Obviously, bulls are hoping to see 1.40 sometime soon. Next week's price action should be interesting.
GBPJPY is still above a long-term monthly downtrend line but has dipped below the 200-day moving average today with a low, so far, of 131.38. The low for the month was 1.3091 on February 1st. This week has seen choppy price action in many pairs and this one is no different. The pair made a new high last week at 135.54 so there is bullish price behavior to contend with even though the pair is currently correcting. I'd expect 129.25 to contain the correction (.618 of the move up from 125.51) and before that is the prior swing low at 129.52. Resistance is at 135.54, 136.24, and 137.79.
GBPUSD has had a higher close each week this month and this is bullish as long as it holds above 1.5963. However, there's a potential for a double top formation with the high of 1.6300 in early November and the high of 1.6282 in early February. The high this week has been 1.6276. There is no confirmation of the potential double top until price broke below 1.5345, quite a ways below here. If cable can maintain its bullish behavior, expect to see 1.6300, 1.6461 and 1.6878.
USDCAD continues to sink. The low so far this morning is .9796. Support is at .9771 and then .9711, the 2008 low. Below that there's not a lot stopping it until it reaches .9417. The triangle price target was .9549. The only good thing you can say is that if you want to try a long position, the stop can be very tight. Resistance is at .9960 and 1.0058.
USDCHF is another suffering pair with a low yesterday of .9234. This has broken below most reasonable projections of support. I prepared charts earlier this year that show it could get to 90 and it seems to be on its way. The weekly high was .9506. One needs to see a move above that to believe it's recovering but until it can climb above .9784, there's not a lot to say.
USDJPY: The month's high was 83.97, reached the 16th and the pair has been dropping since then with a low so far this morning of 81.66. This is near key support at 81.35. Below this is 81.10 and 80.24. 83.91 is likely to be resistance, the downtrend line of the monthly wedge pattern.
© 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.
GBPUSD—approaching support
Thursday, February 24, 2011
Cable hasn't closed beneath 1.61 since the 14th and its low has stayed above 1.61 since last Friday (although it was within two pips of it yesterday) so as it approaches the support of price and the two uptrend lines from January, I might look at a buy. The stop can be tight. The potential targets are 1.6276/83, 1.6300, and 1.6465.
A close below 1.6100 suggests support at 1.6033, 1.6008/00, 1.5965/44, 1.5832/10 and 1.5747.
Here's the three-hour 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.
A close below 1.6100 suggests support at 1.6033, 1.6008/00, 1.5965/44, 1.5832/10 and 1.5747.
Here's the three-hour 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.
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.
AUDUSD—working out divergence
On the hourly chart, one can see a completed AB=CD pattern with a pullback to about the .618 of the A to D range. This comes after a positive divergence between price and RSI so I'd expect at least a slight rally. Price has overtaken the short-term resistance line and recent high of 1.0083. I went long at 1.0068 but don't have a lot of faith in it and have moved my stop to breakeven. We'll have to see how far it goes. Next resistance is 1.0137/58, then 1.0200.
Here's the hourly 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.
Here's the hourly 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.
AUDUSD—sideways
Aussie had a higher high and higher low yesterday but is still within sideways action largely around the parity level. Since January 31 there have been seven lows below parity, most above 99.60. There has only been two closes below parity in that same period of time, both within seven pips of parity. As to the upside, the high for February has been 1.0200 back on the 4th and while it has come close (yesterday's high was 1.0079) so far no cigar. The bulls need to first sustain a close above 1.0200. On the downside, .9950/16 is the line in the sand.
If the close over 1.0200/57 happens, the longer-term probability is for the pair to break above the daily triangle. It make also be possible for the pair to approach the top of the upward sloping rectangle. However, before that happens, sideways activity could continue another several days. One thing to keep an eye on is RSI. On the daily chart, it's nudging below the uptrend line. Similar action on price makes this a concern.
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.
If the close over 1.0200/57 happens, the longer-term probability is for the pair to break above the daily triangle. It make also be possible for the pair to approach the top of the upward sloping rectangle. However, before that happens, sideways activity could continue another several days. One thing to keep an eye on is RSI. On the daily chart, it's nudging below the uptrend line. Similar action on price makes this a concern.
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.
USDJPY—dropping
My long from 82.73 stopped out at -40 pips. Price action has carried down such that it's back inside the breakout above the resistance down trend line from July of last year and is approaching the downtrend line from June at 81.40. This is also near the uptrend line of the roughly sideways or triangle action that has been containing price action since the beginning of November. Let's see what price does there.
Support is at 81.40/35, 81.12, 80.94 and 80.31.
© 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.
Support is at 81.40/35, 81.12, 80.94 and 80.31.
© 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—approaching resistance
Wednesday, February 23, 2011
Euro is approaching resistance near 1.3750, composed of price (Feb. 9th high of 1.3744), confluence, a downward trend line, and a speed line. It's possible it will fail here. If so, look for support at 1.3650, 1.3526 and 1.3429. Above 1.3750 opens the possibility of 1.3862. Only above here can a strong bullish case be made. Watch momentum on the shorter time frame charts.
© 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.
© 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.
AUDUSD—weak
While there's not much to add to the daily analysis from yesterday, Aussie closed two pips higher than Monday's close with a lower high and lower low than Monday. This is weak behavior after Monday's disappointing price action. Watch the boundary of 1.0013—it has dipped below there this morning. A close below .9968 would be very negative.
Resistance is at 1.0158/80 (last week's high, trend line), 1.0257, and 1.0300.
Support is at .9985, .9968/44, .9916, and .9896/88.
No chart until there's more definitive price action.
© 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.
Resistance is at 1.0158/80 (last week's high, trend line), 1.0257, and 1.0300.
Support is at .9985, .9968/44, .9916, and .9896/88.
No chart until there's more definitive price action.
© 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.
USDJPY—caution
While it would be safest to trade this pair at the extremes of the sideways range, I bought this pair yesterday at 82.73. My reasons were that this was near the 82.73 downtrend line of the bull flag drawn on the daily chart below. This was also not very far above the downtrend line from the July, 2010 high at 82.40. Finally, it was also near the 50% retracement of the move up from 81.12 to 83.97. A rally will bring the pair to resistance at 83.55, 83.97, and 84.51 (Dec. high). A possible price projection based on EW is 84.99 (wave v = wave i). At that point I'd look for a short position.
The price movement is taking place within a roughly sideways channel after a very long downtrend so it's possible price can collapse. However, note that the price is edging above downtrend lines. This suggests a period of reaction or consolidation before any downtrend resumes. The most recent range is between 80.94 to 85.07 so there's some room for upward price movement.
If the pair doesn't rally and drops below 82.40, additional support is at 81.12, 80.94 and 80.31. Note that if it drops below the rectangle, there's room for quite a nice move down based on the width of the rectangle. Bottom line here is that you must be cautious with this pair and inexperienced traders may want to sit it out until price approaches one of the two boundaries of the rectangle .
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.
The price movement is taking place within a roughly sideways channel after a very long downtrend so it's possible price can collapse. However, note that the price is edging above downtrend lines. This suggests a period of reaction or consolidation before any downtrend resumes. The most recent range is between 80.94 to 85.07 so there's some room for upward price movement.
If the pair doesn't rally and drops below 82.40, additional support is at 81.12, 80.94 and 80.31. Note that if it drops below the rectangle, there's room for quite a nice move down based on the width of the rectangle. Bottom line here is that you must be cautious with this pair and inexperienced traders may want to sit it out until price approaches one of the two boundaries of the rectangle .
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.
USDJPY—sideways
Tuesday, February 22, 2011
On the three-hour chart, the sideways range the pair has been in since the end of December is evident. This range is 80.94 to 85.07. Within that range the downtrend line from the 89.12, July 2010 high is coming in at 82.40. This is near the 82.73 downtrend line of the bull flag. The two of these should serve as support to the current move down. This is the price for a possible short-term long position.
If the pair rallies from this low, resistance is at 83.55, 83.97, and 84.51 (Dec. high). A possible price projection based on EW is 84.99 (wave v = wave i). This is within the range and I'd look to short there.
If the pair doesn't rally then look for support at 81.12 and 80.94.
Here's the three-hour 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.
If the pair rallies from this low, resistance is at 83.55, 83.97, and 84.51 (Dec. high). A possible price projection based on EW is 84.99 (wave v = wave i). This is within the range and I'd look to short there.
If the pair doesn't rally then look for support at 81.12 and 80.94.
Here's the three-hour 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—daily
Towards the end of last week, Euro seemed to be heading up to a resistance line and reached a high of 1.3715 beofre closing the week at 1.3693. Yesterday, though, was a different story and price headed down. The low so far is 1.3526 this morning. It has since recovered to a high of 1.3684 in a series of bullish candles on the hourly chart. Here it once again is meeting an interim resistance line. The pair really needs to hold above 1.3612, the weekly pivot, for a bullish bias to prevail.
On the daily chart, I'm focusing on the upward sloping channel called a bear flag. Today's move down provided a second touch at the bottom of that flag. It's not unreasonable to believe price would now head upwards for another touch at the top which would be in line with longer range targets. However, the upwards price action last week and today has so far topped in the .618 region of the move down from 1.3862. Clearly, this 1.3716 area is the immediate resistance followed by 1.3862. Only above these is the bullish case stronger.
Support is the low of 1.3516 and 1.3479. Below that means the downtrend has been resumed and will open the door to much lower lows. Price action today should be telling.
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.
On the daily chart, I'm focusing on the upward sloping channel called a bear flag. Today's move down provided a second touch at the bottom of that flag. It's not unreasonable to believe price would now head upwards for another touch at the top which would be in line with longer range targets. However, the upwards price action last week and today has so far topped in the .618 region of the move down from 1.3862. Clearly, this 1.3716 area is the immediate resistance followed by 1.3862. Only above these is the bullish case stronger.
Support is the low of 1.3516 and 1.3479. Below that means the downtrend has been resumed and will open the door to much lower lows. Price action today should be telling.
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.
AUDUSD—daily
Yesterday's price action resulted in a lower high (1.0135) and lower low (1.0009) than Friday. That was disappointing after four days of higher highs and higher lows. The low this morning was .9985.
Even with last week's bullish behavior, the pair still can't get above the 1.0257 high everyone keeps waiting for. Each time the pair approaches a high (1.0183, 1.0257, and 1.0200), there's a bearish candle pattern on the weekly chart (not shown). This pair continues to hit a low below parity each week even though it has managed to close above parity for each of the last three weeks.
A few characteristics stand out on the daily chart. First is the symmetrical triangle formation where point E has taken place. From the perspective of EW, this is bullish since triangles resolve in the same direction from which they were entered. In classical technical analysis, symmetrical triangles can be either a continuation or a reversal pattern. Whatever it is, they graphically show the struggle between buyers and sellers which becomes more intense over time. This increasing intensity causes the narrowing of the triangle and it represents doubt, uncertainty, and stalling. The time for it to resolve one way or the other is certainly approaching. 1.0180 is the upper boundary. There needs to be a sustained close above that for the resolution to be complete. Or a sustained close below the lower boundary of 1.0004 although below parity would be better.
Something else that stands out on the chart is the possibility of an ABC correction. There's also a potential topping pattern. As I've mentioned several times, these need a confirmation, first below .9804 and then .9537.
Finally, there's a confirmed uptrend in place. Much of the current price movement is in keeping with consolidation behavior and one can assume that uptrend will resume.
Still, there's negative short-term behavior so scalping is possible. The pair is below the weekly pivot price and on shorter-term charts there is some bearish behavior. However, the best approach for inexperienced traders is to stay out for now.
Resistance is at 1.0158/80 (last week's high, trend line), 1.0257, and 1.0300.
Support is at .9985, .9944, .9916, and .9896/88.
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.
Even with last week's bullish behavior, the pair still can't get above the 1.0257 high everyone keeps waiting for. Each time the pair approaches a high (1.0183, 1.0257, and 1.0200), there's a bearish candle pattern on the weekly chart (not shown). This pair continues to hit a low below parity each week even though it has managed to close above parity for each of the last three weeks.
A few characteristics stand out on the daily chart. First is the symmetrical triangle formation where point E has taken place. From the perspective of EW, this is bullish since triangles resolve in the same direction from which they were entered. In classical technical analysis, symmetrical triangles can be either a continuation or a reversal pattern. Whatever it is, they graphically show the struggle between buyers and sellers which becomes more intense over time. This increasing intensity causes the narrowing of the triangle and it represents doubt, uncertainty, and stalling. The time for it to resolve one way or the other is certainly approaching. 1.0180 is the upper boundary. There needs to be a sustained close above that for the resolution to be complete. Or a sustained close below the lower boundary of 1.0004 although below parity would be better.
Something else that stands out on the chart is the possibility of an ABC correction. There's also a potential topping pattern. As I've mentioned several times, these need a confirmation, first below .9804 and then .9537.
Finally, there's a confirmed uptrend in place. Much of the current price movement is in keeping with consolidation behavior and one can assume that uptrend will resume.
Still, there's negative short-term behavior so scalping is possible. The pair is below the weekly pivot price and on shorter-term charts there is some bearish behavior. However, the best approach for inexperienced traders is to stay out for now.
Resistance is at 1.0158/80 (last week's high, trend line), 1.0257, and 1.0300.
Support is at .9985, .9944, .9916, and .9896/88.
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.
President's Day
Monday, February 21, 2011
No posts today because I'm away for the holiday weekend. Be careful as European session draws to a close as it's a holiday in the U.S. and the markets and banks are closed. See you Tuesday.
EURUSD—three-hour chart
Friday, February 18, 2011
The most notable feature of the three-hour chart (to me) is the AB=CD pattern. It's very symmetrical and is valid by all the rules one applies to such a pattern.
Thinking about the psychology of the AB=CD pattern, sellers were active at point A and price dropped accordingly to the B point. When price rose, to point C, those who weren't in on the first ride down, jumped in. Some of the shorts from A took profits, fearful of further price rise, but that didn't happen and price again headed down to D. Here, though, bulls are waiting and willing to buy and price heads up. Those original shorts who didn't take profits at B or those who jumped in at point C decide to take profits which causes more buying to take place because that's what they must do to cover their shorts. Those who sold at point D are now getting nervous and may cover or are being set up for a short squeeze. Price, then, continues up which it is in fact doing. As it continues up, more timid bulls get bolder and that’s the dance we participate in.
The other thing notable on the chart is the channel. Last night price was slapped down at 1.3627, the upper boundary. While this is short-term bearish, the bulls aren't throwing in the towel yet. So far, price is finding support at 1.3546. This is near two speed lines which makes me a bit wary that it may rise from here.
Finally, this could be the beginning of the third of a third wave on the three-hour chart which should be a good downward move although there's some good support below.
Resistance is at 1.3627/50 and 1.3694. Above this, expect to see resistance at 1.3769 and then 1.3850/62.
Support is here at 1.3546, then the area between 1.3451 and 1.3462 is very strong. At least it was—third Friday's are option expiration day each month so let's see if that makes a difference.
Here's the three-hour 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.
Thinking about the psychology of the AB=CD pattern, sellers were active at point A and price dropped accordingly to the B point. When price rose, to point C, those who weren't in on the first ride down, jumped in. Some of the shorts from A took profits, fearful of further price rise, but that didn't happen and price again headed down to D. Here, though, bulls are waiting and willing to buy and price heads up. Those original shorts who didn't take profits at B or those who jumped in at point C decide to take profits which causes more buying to take place because that's what they must do to cover their shorts. Those who sold at point D are now getting nervous and may cover or are being set up for a short squeeze. Price, then, continues up which it is in fact doing. As it continues up, more timid bulls get bolder and that’s the dance we participate in.
The other thing notable on the chart is the channel. Last night price was slapped down at 1.3627, the upper boundary. While this is short-term bearish, the bulls aren't throwing in the towel yet. So far, price is finding support at 1.3546. This is near two speed lines which makes me a bit wary that it may rise from here.
Finally, this could be the beginning of the third of a third wave on the three-hour chart which should be a good downward move although there's some good support below.
Resistance is at 1.3627/50 and 1.3694. Above this, expect to see resistance at 1.3769 and then 1.3850/62.
Support is here at 1.3546, then the area between 1.3451 and 1.3462 is very strong. At least it was—third Friday's are option expiration day each month so let's see if that makes a difference.
Here's the three-hour 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—daily
The daily chart has quite a bit of interest.
First, there's a bull flag which I outlined in blue. The target for this flag is around 1.4282 depending on where it breaks out. This is in line with a monthly downtrend line which should give any Euro bear reason to pause and at least consider the possibility. Euro must settle above 1.38 for this to be realistic.
There's also a smaller bear flag that I outlined in dark grey. The top of this is about 1.3642. As I've blogged this week, this is also a 50% retracement of the move down. As I also blogged yesterday, I expected the pair to find significant resistance at 1.3617. Euro edged above that last evening to 1.3627. I'm not thrilled with it edging above—it was good resistance and it shows the bulls are in there. It did trigger my short sell order at 1.3619 which I've obviously set to breakeven.
The lower boundary of this bear flag is about 1.35. If that holds, then Euro will try another upward breakout. If it doesn't hold then shorts can expect a drop to around 1.3069 which is close to the psychological support of 1.30. However, price support of 1.3429 and some significant fibo support around 1.3368 is in the way of it getting there.
RSI is nudging its uptrend line and a drop below, along with a drop below the blue, price uptrend line will be bearish.
Bottom line here is that I'm obviously bearish but there's enough conflicting information to suggest that the price top might not be in. Keep stops tight if short. If you haven't entered, be careful when choosing an entry.
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.
First, there's a bull flag which I outlined in blue. The target for this flag is around 1.4282 depending on where it breaks out. This is in line with a monthly downtrend line which should give any Euro bear reason to pause and at least consider the possibility. Euro must settle above 1.38 for this to be realistic.
There's also a smaller bear flag that I outlined in dark grey. The top of this is about 1.3642. As I've blogged this week, this is also a 50% retracement of the move down. As I also blogged yesterday, I expected the pair to find significant resistance at 1.3617. Euro edged above that last evening to 1.3627. I'm not thrilled with it edging above—it was good resistance and it shows the bulls are in there. It did trigger my short sell order at 1.3619 which I've obviously set to breakeven.
The lower boundary of this bear flag is about 1.35. If that holds, then Euro will try another upward breakout. If it doesn't hold then shorts can expect a drop to around 1.3069 which is close to the psychological support of 1.30. However, price support of 1.3429 and some significant fibo support around 1.3368 is in the way of it getting there.
RSI is nudging its uptrend line and a drop below, along with a drop below the blue, price uptrend line will be bearish.
Bottom line here is that I'm obviously bearish but there's enough conflicting information to suggest that the price top might not be in. Keep stops tight if short. If you haven't entered, be careful when choosing an entry.
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—weekly bearish but uncertainty
The weekly chart is also bearish with three progressively shorter downtrend lines that should serve as resistance. The nearest one has the resistance at 1.3774 which is in line with shorter term price projections should the pair climb over 1.3750. The second one nudges into the 1.40 area and just as I wrote in the last post on the monthly chart, there are older price projections that support this. So there's a bit of uncertainty as to where price might go.
Also of interest on the weekly chart is the failed evening star pattern. I circled the first two candles that would have been part of this pattern. The third one would have had to close deep into the body of the first candle. Obviously, this didn't happen. I always take note of failed patterns because they sometimes are powerful signals that the opposite price action may occur. The two completed weekly candles since then (this is the third week) were indecisive but seemed to be rejecting higher prices with their long upper shadows.
This week is the third week with a lower low and lower high which is bearish. However, the 10 and 20 EMA have been serving as support, even for this week's candle with a long, lower shadow (so far it's a shadow, but how likely is the pair to drop significantly today?)
Another thing to note on the chart is that this is the 5th week of a primary cycle following the low from January. I could go further into a cycle discussion but I won't as I'm unconvinced it's relevant. Still, it's something to be aware of. If there is any meaning, this is part of a longer cycle and it's unlikely to have topped yet. However, I think price will contain any additional rise and not some mystical cycle mumbo-jumbo so again, the place to watch is the upper 1.37 price and, if it gets beyond that, the 1.40 area. Support on the weekly chart is at 1.3480 and 1.3428, the 10- and 20-EMA.
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.
Also of interest on the weekly chart is the failed evening star pattern. I circled the first two candles that would have been part of this pattern. The third one would have had to close deep into the body of the first candle. Obviously, this didn't happen. I always take note of failed patterns because they sometimes are powerful signals that the opposite price action may occur. The two completed weekly candles since then (this is the third week) were indecisive but seemed to be rejecting higher prices with their long upper shadows.
This week is the third week with a lower low and lower high which is bearish. However, the 10 and 20 EMA have been serving as support, even for this week's candle with a long, lower shadow (so far it's a shadow, but how likely is the pair to drop significantly today?)
Another thing to note on the chart is that this is the 5th week of a primary cycle following the low from January. I could go further into a cycle discussion but I won't as I'm unconvinced it's relevant. Still, it's something to be aware of. If there is any meaning, this is part of a longer cycle and it's unlikely to have topped yet. However, I think price will contain any additional rise and not some mystical cycle mumbo-jumbo so again, the place to watch is the upper 1.37 price and, if it gets beyond that, the 1.40 area. Support on the weekly chart is at 1.3480 and 1.3428, the 10- and 20-EMA.
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.
EURUSD—monthly bearish but higher possible
Because of contradictory signals in the shorter time frame, I decided to pull back again to the monthly chart.
February's low so far of 1.3429 is significantly higher than January's low of 1.2874. The high of 1.3862 this month (which occurred the first of the month) is higher than January's high of 1.3759. Higher high and higher low has the month on track to be up from last month which says, clearly, that the bulls have control.
This does not make the monthly chart bullish. It is not a trend change from down to up because there have been two lower highs that touched and confirmed the downtrend line (1.6041 and 1.5144) and two lower lows (1.2329 and 1.1892). The monthly chart is bearish no matter how you look at it. Unless you're a died-in-the-wool Euro bull who sees this as a temporary correction off the high of 1.6041. Good luck with that.
What's not clear on the monthly chart is whether the third high is really in yet. 1.4282 didn't quite make it to the downtrend line which is bearish. However, with the bullish activity so far this month, it's possible the pair could continue up and this would reinstate earlier projections I had for the pair at the end of last year that reached into the 1.43 area. This would be consistent with both the longer-term downtrend line from July '08 and the shorter monthly bear flag up. It's too soon to spend time dwelling on this—there are significant resistance points along the way—but it's something to stay cognizant of, especially with all the bearish sentiment floating about. Bottom line: keep stops on short positions tight.
Obviously, on any chart, the near-term resistance to overcome is 1.3862. On much shorter-term charts, the resistance is 1.3627 which it tapped last evening.
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.
February's low so far of 1.3429 is significantly higher than January's low of 1.2874. The high of 1.3862 this month (which occurred the first of the month) is higher than January's high of 1.3759. Higher high and higher low has the month on track to be up from last month which says, clearly, that the bulls have control.
This does not make the monthly chart bullish. It is not a trend change from down to up because there have been two lower highs that touched and confirmed the downtrend line (1.6041 and 1.5144) and two lower lows (1.2329 and 1.1892). The monthly chart is bearish no matter how you look at it. Unless you're a died-in-the-wool Euro bull who sees this as a temporary correction off the high of 1.6041. Good luck with that.
What's not clear on the monthly chart is whether the third high is really in yet. 1.4282 didn't quite make it to the downtrend line which is bearish. However, with the bullish activity so far this month, it's possible the pair could continue up and this would reinstate earlier projections I had for the pair at the end of last year that reached into the 1.43 area. This would be consistent with both the longer-term downtrend line from July '08 and the shorter monthly bear flag up. It's too soon to spend time dwelling on this—there are significant resistance points along the way—but it's something to stay cognizant of, especially with all the bearish sentiment floating about. Bottom line: keep stops on short positions tight.
Obviously, on any chart, the near-term resistance to overcome is 1.3862. On much shorter-term charts, the resistance is 1.3627 which it tapped last evening.
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.
AUDUSD—holding parity
Thursday, February 17, 2011
While Aussie has been correcting since the early January high of 1.0256, the pair has managed to close above parity in all but two of the last thirteen trading days. On those two, one was three pips below; the other was seven.
The daily chart below shows an upward channel beginning at the end of November. I bought on Tuesday at the intersection of two uptrend lines (.9963), one from July and one from November. I added to my position this morning on a slight dip to 1.0030.
Ideally the pair would stay above .9980 (trend line and near the .382 retracement of the move down from 1.0257) and the recent low at .9944. Below .9804 would be bearish as it would confirm a double top (the 1.0257 and 1.0200 highs). Below .9538 would confirm a triple top or head and shoulders pattern with a cool target of .8819.
However, the pair is in a triangle on the daily chart and the low of .9944 was a fifth touch (point E). Symmetrical triangles are often continuation patterns. From the EW perspective, they resolve in the direction from which they were entered. In the case of the Aussie this is upward. Also, the pair is still in a long-term uptrend. So buying is the higher probability trade on the daily chart. Still, it needs to settle above 1.0257 to be really bullish.
Here's the 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.
The daily chart below shows an upward channel beginning at the end of November. I bought on Tuesday at the intersection of two uptrend lines (.9963), one from July and one from November. I added to my position this morning on a slight dip to 1.0030.
Ideally the pair would stay above .9980 (trend line and near the .382 retracement of the move down from 1.0257) and the recent low at .9944. Below .9804 would be bearish as it would confirm a double top (the 1.0257 and 1.0200 highs). Below .9538 would confirm a triple top or head and shoulders pattern with a cool target of .8819.
However, the pair is in a triangle on the daily chart and the low of .9944 was a fifth touch (point E). Symmetrical triangles are often continuation patterns. From the EW perspective, they resolve in the direction from which they were entered. In the case of the Aussie this is upward. Also, the pair is still in a long-term uptrend. So buying is the higher probability trade on the daily chart. Still, it needs to settle above 1.0257 to be really bullish.
Here's the 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—looking to short
Euro climbed to a high of 1.3609 overnight. This is within my 1.3590 to 1.3650 range that I wrote about yesterday. There were several reasons this zone was possible. First, the .382 retracement and confluence are together at 1.3594. Second, the upper boundary of the channel and the 50% of the retracement of the move down are found at 1.3642. Finally, at 1.3617, a downward trend line from 1.3862, an upper boundary of the bear flag, and a short-term speed line converge. As a result, I'm still looking for a short on weakness in this area.
If it makes it past this area, well bully for it. Then I'd be watching the 1.3697 to 1.3769 zone for possible weakness as I explained yesterday. Beyond that…the uptrend has resumed. As I noted yesterday, this channel could also be a daily flag so close attention needs to be paid at its upper boundaries because the target for this is 1.4282. This isn't a possibility until the pair settles above 1.38.
I'm thinking, though, that this could be the beginning of the third of a third wave on the three-hour chart which should move price quite a bit down. Remember that the area between 1.3451 and 1.3462 is well-defended so that's strong support.
Here's the three-hour 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.
If it makes it past this area, well bully for it. Then I'd be watching the 1.3697 to 1.3769 zone for possible weakness as I explained yesterday. Beyond that…the uptrend has resumed. As I noted yesterday, this channel could also be a daily flag so close attention needs to be paid at its upper boundaries because the target for this is 1.4282. This isn't a possibility until the pair settles above 1.38.
I'm thinking, though, that this could be the beginning of the third of a third wave on the three-hour chart which should move price quite a bit down. Remember that the area between 1.3451 and 1.3462 is well-defended so that's strong support.
Here's the three-hour 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—update
Wednesday, February 16, 2011
Euro took quite a tumble this past hour. However, it has now found support three times within the past 47 hours between 1.3451 and 1.3462. This is not a coincidence—there's something about that price that is meaningful. What, we don't know, but is it possible somebody big has an options barrier there? Regardless, below 1.3450 would be bad for the bulls. Another thing to note on the hourly chart is the expanding range with three higher highs. The potential butterfly pattern I wrote about earlier for this time frame is dead.
© 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.
© 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.
USDCHF—moving on up
The Swissy found some energy this morning and appears to be making another run for the prior .9784 high that it just missed making on the 11th. Perhaps this time it can overtake it.The bull flag has a target of about .9950 and 1.0148 if you run it off the daily with the flagpole beginning at .9329. Between those two would be resistance at 1.0067. I'm still long from .9444 and added another long position on Monday at .9674.
This is taking place within a general dollar strenthening. Let's see how long it lasts.
Here's the three-hour 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.
This is taking place within a general dollar strenthening. Let's see how long it lasts.
Here's the three-hour 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.
USDX—weekly
It's been a while since I've discussed the USDX. Despite all the gloom and doom around the USD, there hasn't been a lot to say. The index is still tracking upward with three (almost four) touches on the uptrend line since the lows in 2008. The negative divergence appears to be working itself out. 76.87 formed on the low of a hanging man candle should be support.
Here's the 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.
Here's the 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—potential revesal
Euro is bouncing around a bit but while there's short-term bullish behavior, there's evidence that a bearish downward move will take place between 1.3590 to 1.3650. The .382 retracement and confluence are together at 1.3594. In addition, as I wrote yesterday, the upper boundary of the channel (which is contracting) and the 50% of the retracement of the move down are found between 1.3641 and 1.3644.
Besides that evidence, the hourly chart (not shown) indicates a potential butterfly bearish pattern. X begins the pattern at 1.3558; A is at 1.3432; B at 1.3550; and C is 1.3477. Point D would complete the pattern and should be between 1.3595 and 1.3637. As a result, I'll look to short in that general area but only if there are bearish indicators such as divergence or bearish candles.
The reason I'll want additional evidence is that Euro could get higher, possibly to 1.3769. There's an AB=CD pattern (marked below) on the three hour chart where AB (1.3862 to 1.3509) and CD (1.3744 to 1.3429) are approximately equal at 353 and 315 pips respectively. This is a bullish pattern and the target for it is between 1.3697 and 1.3769. These coincide almost perfectly with the .618 and the .786 retracement points.
Since, we could be at the beginning of a third wave down on the daily chart, I'd try a short here as well.
As I noted yesterday, this channel could also be a daily flag so close attention needs to be paid at its upper boundaries because the target for this is 1.4282. This isn't a possibility until the pair settles above 1.38. At that point, the bears would have to go back to their cave.
Here's the three-hour 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.
Besides that evidence, the hourly chart (not shown) indicates a potential butterfly bearish pattern. X begins the pattern at 1.3558; A is at 1.3432; B at 1.3550; and C is 1.3477. Point D would complete the pattern and should be between 1.3595 and 1.3637. As a result, I'll look to short in that general area but only if there are bearish indicators such as divergence or bearish candles.
The reason I'll want additional evidence is that Euro could get higher, possibly to 1.3769. There's an AB=CD pattern (marked below) on the three hour chart where AB (1.3862 to 1.3509) and CD (1.3744 to 1.3429) are approximately equal at 353 and 315 pips respectively. This is a bullish pattern and the target for it is between 1.3697 and 1.3769. These coincide almost perfectly with the .618 and the .786 retracement points.
Since, we could be at the beginning of a third wave down on the daily chart, I'd try a short here as well.
As I noted yesterday, this channel could also be a daily flag so close attention needs to be paid at its upper boundaries because the target for this is 1.4282. This isn't a possibility until the pair settles above 1.38. At that point, the bears would have to go back to their cave.
Here's the three-hour 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.
Prices compared to 2010 year end
The chart below shows that only the Aussie, EURGBP, and USDCAD have gone down so far this year. GBPJPY has gained the most in both pips and percent and all the yen crosses have done well in general.
© 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.
© 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—three-hour channel
Tuesday, February 15, 2011
My short position was stopped out at 1.3514 (-14 pips).
Euro is headed up again, possibly to the intersection of the upper boundary of the channel (rectangle) and the 50% of the retracement of the move down at 1.3645. This rectangle could also be a daily flag so close attention needs to be paid at its upper boundaries. It could also be the beginning of a third wave down on the daily chart.
Within the rectangle, there are two impulsive waves down of five waves each separated by a three wave correction. Waves one and three are 318 and 315 pips respectively which means wave five must be less than 315 pips (an EW rule is that wave three cannot be the shortest wave). Because wave two was sharp, wave four should be less so (the guideline of alternation).
Resistance is 1.3590 (confluence and parity) and 1.3645 (see above). Above those would bring 1.3700, 1.3750 and 1.3862 to the table.
Support is at 1.3429 and 1.3380.
We'll just have to wait to see but my current plans are to go short at the upper boundary or, if momentum seems strong, buy on a breakout (most likely on the pullback of a breakout).
Here's the three-hour 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.
Euro is headed up again, possibly to the intersection of the upper boundary of the channel (rectangle) and the 50% of the retracement of the move down at 1.3645. This rectangle could also be a daily flag so close attention needs to be paid at its upper boundaries. It could also be the beginning of a third wave down on the daily chart.
Within the rectangle, there are two impulsive waves down of five waves each separated by a three wave correction. Waves one and three are 318 and 315 pips respectively which means wave five must be less than 315 pips (an EW rule is that wave three cannot be the shortest wave). Because wave two was sharp, wave four should be less so (the guideline of alternation).
Resistance is 1.3590 (confluence and parity) and 1.3645 (see above). Above those would bring 1.3700, 1.3750 and 1.3862 to the table.
Support is at 1.3429 and 1.3380.
We'll just have to wait to see but my current plans are to go short at the upper boundary or, if momentum seems strong, buy on a breakout (most likely on the pullback of a breakout).
Here's the three-hour 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.
GBPJPY—rally
My short from 134.02 profit-stopped out at 133.91 (+11 pips, barely worth bothering with).
In early morning London trading the pair spiked to 134.59 before falling back. I was awake, trying to catch up on some analysis after being out of town part of last week. I watched the Guppy immediately fall but around the 50% retracement point of the move up from yesterday's low it hesitated.
I bought at 133.91 (the same price I'd been stopped at in the other direction but I didn't notice that until just now). My reason for doing so, besides the hesitation, was that momentum wasn't supporting the move down from Thursday's high. Also, this pair had violated a long term resistance line and that's a powerful hint things may be changing. So I'm long. After I bought the pair spiked down a bit more, almost to the .618 retracement of the move up from yesterday. After that it resumed its rally, so far reaching 134.97.
Support is at 1.3319 (yesterday's low) and then there's a zone of support down to 132.00. Below that is 130.01.
Resistance is at 135.22, 136.24, and 137.79. After that there is little in the way of resistance until 141.19 (confluence) and then price resistance at 145.98, last April's high.
If one assumes this is an ABC correction off of 125.51, targets are 136.53 if wave C equals A and 140.86 at 1.618A. If one assumes a daily flag, the target is 136.25. So if I don't get stopped out (my stop is now slightly better than breakeven), I'll take partial profits in the 136 area.
Here's a 15-minute 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.
In early morning London trading the pair spiked to 134.59 before falling back. I was awake, trying to catch up on some analysis after being out of town part of last week. I watched the Guppy immediately fall but around the 50% retracement point of the move up from yesterday's low it hesitated.
I bought at 133.91 (the same price I'd been stopped at in the other direction but I didn't notice that until just now). My reason for doing so, besides the hesitation, was that momentum wasn't supporting the move down from Thursday's high. Also, this pair had violated a long term resistance line and that's a powerful hint things may be changing. So I'm long. After I bought the pair spiked down a bit more, almost to the .618 retracement of the move up from yesterday. After that it resumed its rally, so far reaching 134.97.
Support is at 1.3319 (yesterday's low) and then there's a zone of support down to 132.00. Below that is 130.01.
Resistance is at 135.22, 136.24, and 137.79. After that there is little in the way of resistance until 141.19 (confluence) and then price resistance at 145.98, last April's high.
If one assumes this is an ABC correction off of 125.51, targets are 136.53 if wave C equals A and 140.86 at 1.618A. If one assumes a daily flag, the target is 136.25. So if I don't get stopped out (my stop is now slightly better than breakeven), I'll take partial profits in the 136 area.
Here's a 15-minute 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—monthly
With the ups and downs of daily and intraday movements, it's helpful to back off and look at the much larger picture. Below is a monthly chart of the Euro beginning in March 2006.The low then was 1.1860. Interesting that the pair came within pips of that low during the current downtrend. This means the Euro basically went nowhere in the last five years although there was a lot of money to be made during this time.
An obvious characterisic of the chart is that the pair has been in a downtrend for 31 months from its July 2008 high. There have been two touches of the downtrend line which is all it takes to make the line valid. So far at least, each correction in this downtrend has been well capped by the downtrend line. In addition, each correction is sharp (defying the Elliott guideline of alternation but that's neither here nor there), each retracing about 75% of the prior move down.
Another thing to note about the chart is that at least on a gross basis, an Elliott impulsive count down that assessed the current action as being within a wave four correction, doesn't apply for the simple reason that if wave one ended at 1.2329 and wave three at 1.1892, then wave four, peaking so far at 1.4282 has violated the territory of wave one. This would violate one of the three ironclad rules of EWT.
Perhaps this is currently wave three where two ended at 1.5144 and we're in two of three? This is possible. If this is true, wave three of three either began at 1.4282 or will be beginning from the top of the current corrective rectangle up (note that price could exceed 1.45 under this scenario).
So what's a trader to do if one is not still long from either 1.6041 or 1.5144 or even 1.4282? If one believes this is a downtrend, all one can do is sell highs. If one believes it's an uptrend after a temporary ABC correction which ended with 1.1892 (it's possible—but note that for a zigzag correction, wave C exceeded .618 of A but fell far short of equality with it), then buy rallies. Or one can trade this as a sideways, upward slanting movement which I actually like and is the reason I go long sometimes and short other times based on patterns on shorter time frames. Every long term movement is made up of numerous short term patterns. I'll look at some of these in the next couple of days. This approach requires flexibility. More important, it requires giving up preconceived notions of bullishness or bearishness and relying on the chart to guide one's trades. This approach means profits.
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.
An obvious characterisic of the chart is that the pair has been in a downtrend for 31 months from its July 2008 high. There have been two touches of the downtrend line which is all it takes to make the line valid. So far at least, each correction in this downtrend has been well capped by the downtrend line. In addition, each correction is sharp (defying the Elliott guideline of alternation but that's neither here nor there), each retracing about 75% of the prior move down.
Another thing to note about the chart is that at least on a gross basis, an Elliott impulsive count down that assessed the current action as being within a wave four correction, doesn't apply for the simple reason that if wave one ended at 1.2329 and wave three at 1.1892, then wave four, peaking so far at 1.4282 has violated the territory of wave one. This would violate one of the three ironclad rules of EWT.
Perhaps this is currently wave three where two ended at 1.5144 and we're in two of three? This is possible. If this is true, wave three of three either began at 1.4282 or will be beginning from the top of the current corrective rectangle up (note that price could exceed 1.45 under this scenario).
So what's a trader to do if one is not still long from either 1.6041 or 1.5144 or even 1.4282? If one believes this is a downtrend, all one can do is sell highs. If one believes it's an uptrend after a temporary ABC correction which ended with 1.1892 (it's possible—but note that for a zigzag correction, wave C exceeded .618 of A but fell far short of equality with it), then buy rallies. Or one can trade this as a sideways, upward slanting movement which I actually like and is the reason I go long sometimes and short other times based on patterns on shorter time frames. Every long term movement is made up of numerous short term patterns. I'll look at some of these in the next couple of days. This approach requires flexibility. More important, it requires giving up preconceived notions of bullishness or bearishness and relying on the chart to guide one's trades. This approach means profits.
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.
EURUSD—update
Monday, February 14, 2011
Euro has retraced .382 of the move down since NorAm came in and is headed for 50% at 1.3492. Let's see if it can overcome that.
GBPJPY—stalling
I wrote last week that I'd shorted the Guppy after it touched 134.26. I entered two positions at 1.3402 and closed one of them on Friday when it seemed as though it was stalling (133.60 for +42 pips). The pair is stubbornly staying above 132.85 and there's a zone of support down to 132.00. Until it breaks below that there's not a lot to say. Below 132.00 is support at 130.01. If it does begin to break down, it's evidence that the move above the three-hour upward channel was a fake-out and the bottom of the channel is a potential target.
If it can resume its rally, a successful close over 134.26 would put the pair on track to resistance at 135.22, 136.24, and 137.79. After that there is little in the way of resistance until 141.19 (confluence) and then price resistance at 145.98, last April's high.
Here's the three-hour 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.
If it can resume its rally, a successful close over 134.26 would put the pair on track to resistance at 135.22, 136.24, and 137.79. After that there is little in the way of resistance until 141.19 (confluence) and then price resistance at 145.98, last April's high.
Here's the three-hour 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—pressure is on
The bearish pressure that followed the high of 1.3861 appears to still be exerting downward pressure with a drop to a low of 1.3432 so far this morning. There's a small head and shoulders on the daily chart (left shoulder was 1.3789; head was 1.3861; right shoulder was 1.3744). The confirmation level was 1.3509 and the target is 1.3157. Before it gets there, support is at 1.3396 and 1.3244/32 (strong support). Euro is within a larger downward channel and the lower boundary is 1.2607, right on a speed line as well. If the pair can't climb back and close above 1.35 today, the bears will have seized control and won't easily give it back.
Resistance is at 1.3498 and 1.3744. 1.40 seems a dream at this point.
I went short on Friday at 1.3535 based on the shorter-term charts.
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.
Resistance is at 1.3498 and 1.3744. 1.40 seems a dream at this point.
I went short on Friday at 1.3535 based on the shorter-term charts.
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.
AUDUSD—3-Hour
Dropping down quite a bit from the weekly chart, Aussie is in a triangle on the three-hour chart as well, entering it from the low of .9538 last year. If this is a standard, five-touch triangle, there will be one more small push to the upside ending around 1.0190 which would be point E. After that price would fall, eventually puncturing the triangle's lower boundary around .9975. The three-hour chart also has negative diversion of price and RSI.
At this point, it's probably best to stand aside until this is resolved. My inclination is to go long but I'm going to wait a bit and see how this all plays out. If it resolves to the upside there will still be time to get in and make pips as it works its way up within an upward-sloping rectangle on the daily chart (not shown).
Here's the three-hour 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.
At this point, it's probably best to stand aside until this is resolved. My inclination is to go long but I'm going to wait a bit and see how this all plays out. If it resolves to the upside there will still be time to get in and make pips as it works its way up within an upward-sloping rectangle on the daily chart (not shown).
Here's the three-hour 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.
AUDUSD—weekly
Aussie ended last week with the bears probably feeling they were in control, dropping 229 pips from its high on Tuesday to a low on Friday of .9960. This may be an illusion for the bears and if they are in control, it's tenuous.
First, what's bearish? The most significant is that the pair can't seem to gain any traction to get above the 1.0257 high everyone keeps waiting for. Each time the pair approaches a high (1.0183, 1.0257, and 1.0200), there's a bearish candle pattern (circled on the chart below). So supply is coming in and it came in at a lower level this time than the last time. Then, too, the low last week dropped below parity (although it managed to close above at 1.0018). There is also negative divergence on the weekly and daily chart. Finally, the pair could be in an ABC correction from the high of 1.0257. If this is true, the A wave ran from 1.0257 down to .9804; B ran up to 1.0200; and C has started and will move lower.
On the positive side, even though last week had a lower high than the week before (but only by 11 pips), it had a higher low and closed above parity. More important, Aussie approached the bottom of the weekly triangle (which is at .9947 and also near an uptrend line coming in from last June) but didn't quite make it. From an Elliott perspective, the pair entered the triangle from an uptrend and the fact it didn't quite make point E is consistent with the Elliott interpretation of an upward breakout in these types of triangles. The upper boundary is at 1.0184 so that's something to watch this week. A sustained close above would validate that the consolidation is over and the pair is ready to resume it's uptrend. Finally, the longer-term pattern is an uptrend and it hasn't been reversed. Not until a break of .9804 and then .9537 would this change.
A break of .9804 and .9537 would confirm a topping pattern—double/triple top or head and shoulders. These are quite a bit lower than current prices but even if a trader waited until that point, there would be plenty of room to make some serious money. Until then, it's probably safest to assume the pair is consolidating prior to moving higher. Interesting pair to keep an eye on today and this week.
© 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.
First, what's bearish? The most significant is that the pair can't seem to gain any traction to get above the 1.0257 high everyone keeps waiting for. Each time the pair approaches a high (1.0183, 1.0257, and 1.0200), there's a bearish candle pattern (circled on the chart below). So supply is coming in and it came in at a lower level this time than the last time. Then, too, the low last week dropped below parity (although it managed to close above at 1.0018). There is also negative divergence on the weekly and daily chart. Finally, the pair could be in an ABC correction from the high of 1.0257. If this is true, the A wave ran from 1.0257 down to .9804; B ran up to 1.0200; and C has started and will move lower.
On the positive side, even though last week had a lower high than the week before (but only by 11 pips), it had a higher low and closed above parity. More important, Aussie approached the bottom of the weekly triangle (which is at .9947 and also near an uptrend line coming in from last June) but didn't quite make it. From an Elliott perspective, the pair entered the triangle from an uptrend and the fact it didn't quite make point E is consistent with the Elliott interpretation of an upward breakout in these types of triangles. The upper boundary is at 1.0184 so that's something to watch this week. A sustained close above would validate that the consolidation is over and the pair is ready to resume it's uptrend. Finally, the longer-term pattern is an uptrend and it hasn't been reversed. Not until a break of .9804 and then .9537 would this change.
A break of .9804 and .9537 would confirm a topping pattern—double/triple top or head and shoulders. These are quite a bit lower than current prices but even if a trader waited until that point, there would be plenty of room to make some serious money. Until then, it's probably safest to assume the pair is consolidating prior to moving higher. Interesting pair to keep an eye on today and this week.
© 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.
World Money Show
Friday, February 11, 2011
I’m attending the World Money Show in Orlando until tomorrow so I won’t be posting anymore today. It’s always good for a currency trader to get out and listen to people who trade other markets.
As usual when I go away, there's some interesting price action going on with the currency pairs. It will be interesting to see how USDCHF fares as it approaches .9783.
See you Monday.
As usual when I go away, there's some interesting price action going on with the currency pairs. It will be interesting to see how USDCHF fares as it approaches .9783.
See you Monday.
GBPJPY—made it
I haven’t written about this pair since Feb. 1 when I was long from 130.65. I wrote then that the pair had to close above 134.23 for the breakout above the long-term downtrend line to mean anything. Yesterday afternoon, it touched 134.26. I shorted there because I expected it would be good resistance and there was negative divergence. This morning I closed one of the positions; I moved the stop on the other to breakeven. I’m at a conference today so don’t have time to do a lot of analysis but the pair’s behavior is interesting in light of some risk aversion.
Note that it still hasn’t closed above 134.23. I’d expect one of two things in the near-term in order to remain bullish on the pair: it will either quickly retest 134.26 and close above it for the week (very bullish) or it will retrace to .382 or .50 of the recent move up, staying above 132.00 and then retest. This would probably happen next week. Of course, it could always sink like a stone but not until it gets below 130.00 would I be too concerned. It has not been below 130.00 this month although it touched 130.01 on January 31.
A successful close over 134.26 would put the pair on track to resistance at 135.22, 136.24, and 137.79. After that there is very little in the way of resistance until 141.19 (confluence) and then price resistance at 145.98, last April's high.
© 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.
Note that it still hasn’t closed above 134.23. I’d expect one of two things in the near-term in order to remain bullish on the pair: it will either quickly retest 134.26 and close above it for the week (very bullish) or it will retrace to .382 or .50 of the recent move up, staying above 132.00 and then retest. This would probably happen next week. Of course, it could always sink like a stone but not until it gets below 130.00 would I be too concerned. It has not been below 130.00 this month although it touched 130.01 on January 31.
A successful close over 134.26 would put the pair on track to resistance at 135.22, 136.24, and 137.79. After that there is very little in the way of resistance until 141.19 (confluence) and then price resistance at 145.98, last April's high.
© 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.
Euro stalling
Thursday, February 10, 2011
Euro hasn't done much of anything the last 24 hours in line with the indecision that traders seem to be suffering through. As long as support holds at 1.3479, the general tone is at least neutral. However, 1.3862 is the price that the pair needs to overcome for anyone to believe the pair is still bullish.
AUDUSD--stalling
AUDUSD is stalling. Only until it can break above 1.0257 are the bulls going to be vindicated that the uptrend is in force but it just can't seem to quite get there, reaching only 1.0200 last Friday.
A look at the daily chart shows an upward rectangle within a downward sloping rectangle. In addition, if you study the 1.0183 and the 1.0257 tops, you see they're sharp. This last set of topping days is more rounded. People refer to this as Adam and Eve tops--I've never noticed that it makes much difference in overall performance but the rounding does suggest a more gradual drying up and tends to be bearish. Regardless, until there's a close below .9804 or better, .9538, the double or triple top is not confirmed. The bottom of the smaller rectangle is .9926; the lower boundary of the larger one is .9760.
Here's the daily chart:
A look at the daily chart shows an upward rectangle within a downward sloping rectangle. In addition, if you study the 1.0183 and the 1.0257 tops, you see they're sharp. This last set of topping days is more rounded. People refer to this as Adam and Eve tops--I've never noticed that it makes much difference in overall performance but the rounding does suggest a more gradual drying up and tends to be bearish. Regardless, until there's a close below .9804 or better, .9538, the double or triple top is not confirmed. The bottom of the smaller rectangle is .9926; the lower boundary of the larger one is .9760.
Here's the daily chart:
USDCHF—more resistance
Wednesday, February 9, 2011
Swissy managed to climb above the resistance line and the .618 retracement of last week's move down (.9610) to a high of .9661. It has started to stumble a bit and may be forming an evening star candle formation on the three-hour chart. This isn't certain until the current candle closes. .9543/24 is a likely support since it's fib confluence and the prior low. Below that is .9463, .9424, .9331, and .9301.
.9784 is still the number to watch on the upside. I wrote yesterday that the only real resistance was .9688 so it needs to get through this. If it can do so and close above .9784, then it's possible it can get to 1.0280 or more. I have a target on my three-hour Point & Figure chart of 1.0250 which won't be invalidated until .9300 is broken.
I'm still long from .9444 and added another position yesterday at .9578.
Here's the three-hour 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.
.9784 is still the number to watch on the upside. I wrote yesterday that the only real resistance was .9688 so it needs to get through this. If it can do so and close above .9784, then it's possible it can get to 1.0280 or more. I have a target on my three-hour Point & Figure chart of 1.0250 which won't be invalidated until .9300 is broken.
I'm still long from .9444 and added another position yesterday at .9578.
Here's the three-hour 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.
GBPUSD—dragonfly doji
The best Cable could do yesterday was 1.6163 which is better than it has done this morning with a high of 1.6101.
On the three-hour chart yesterday morning, a candle known as a dragonfly formed with a low of 1.6029. These candles with a long lower shadow and open and close prices the same (or as in this case one pip apart), often serve to define where support is. Thus, if Cable closes beneath this, it would be quite bearish.
Another thing to notice on the chart is the series of steps down. The pair has currently climbed back to retest the last one so let's see what happens but I'm leaning towards a sell. I'd like to see a momentum failure on the short-term chart, divergence or bearish candles.
Support is at 1.6029/00, 1.5900, 1.5751, 1.5345, and 1.5274/64 (fib confluence) as well as the round psychological number of 1.50.
Resistance is at 1.6300, 1.6461, 1.6500 and 1.6878
Here's the three-hour 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.
On the three-hour chart yesterday morning, a candle known as a dragonfly formed with a low of 1.6029. These candles with a long lower shadow and open and close prices the same (or as in this case one pip apart), often serve to define where support is. Thus, if Cable closes beneath this, it would be quite bearish.
Another thing to notice on the chart is the series of steps down. The pair has currently climbed back to retest the last one so let's see what happens but I'm leaning towards a sell. I'd like to see a momentum failure on the short-term chart, divergence or bearish candles.
Support is at 1.6029/00, 1.5900, 1.5751, 1.5345, and 1.5274/64 (fib confluence) as well as the round psychological number of 1.50.
Resistance is at 1.6300, 1.6461, 1.6500 and 1.6878
Here's the three-hour 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.
USDCHF—resistance
Tuesday, February 8, 2011
A few minutes ago, Swissy whacked its head on a speed line coming in at .9603. So now it's going to be interesting to see what happens because, as I wrote yesterday, it's just above the top of the range it's been hovering in lately and the .618 of last week's move down is .9610. Given the beating the dollar is taking lately I'm not sure it can pull off a close above here but here's looking at you, kid.
Support is at this morning's low of .9524 (just beneath the recent range) then .9463, .9424, .9331, and the old bugaboo, .9301. .9784 is the number to watch on the upside. The only real resistance between here and there is .9688. If it can maintain this rally and close above .9784, then it's possible it can get to 1.0280 or more. I have a target on my three-hour Point & Figure chart of 1.0250 which won't be invalidated until .9300 is broken.
I'm still long from .9444 but I took some partial profits a few minutes ago for +126 pips.
Here's the three-hour 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.
Support is at this morning's low of .9524 (just beneath the recent range) then .9463, .9424, .9331, and the old bugaboo, .9301. .9784 is the number to watch on the upside. The only real resistance between here and there is .9688. If it can maintain this rally and close above .9784, then it's possible it can get to 1.0280 or more. I have a target on my three-hour Point & Figure chart of 1.0250 which won't be invalidated until .9300 is broken.
I'm still long from .9444 but I took some partial profits a few minutes ago for +126 pips.
Here's the three-hour 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.
GBPUSD—short-term
A reader emailed me to ask if I was short Cable since I commented in the last post that my money was on the bears. No, I'm not. In fact I'm studying the short-term charts now which look somewhat bullish. It's currently at short-term support of 1.6036.
What I should always remember to say in the weekly analysis is that this is longer term analysis. In the case of Cable, it is near the top of the triangle which would imply a short. Had I been on top of it when it was at 1.6163 overnight, I might have sold there.I wasn't and didn't. At this point, I need to see momentum fail on the short-term chart or a retest of 1.6150 or thereabouts with failing momentum or divergence or bearish candles.
© 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.
What I should always remember to say in the weekly analysis is that this is longer term analysis. In the case of Cable, it is near the top of the triangle which would imply a short. Had I been on top of it when it was at 1.6163 overnight, I might have sold there.I wasn't and didn't. At this point, I need to see momentum fail on the short-term chart or a retest of 1.6150 or thereabouts with failing momentum or divergence or bearish candles.
© 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.
GBPUSD—weekly
Cable has managed six days of closes over 1.60 and it looks as though the bulls are fixated on overtaking 1.6300. What can't be overlooked, however, is that it's coiling inside a triangle on the weekly chart and the lower boundary, a logical target for the next move, is 1.4619 or thereabouts. Before it got there it would find support at 1.5900, 1.5751, 1.5345, and 1.5274/64 (fib confluence) as well as the round psychological number of 1.50. Of course, an Elliott Wave afficianado would say the pair must break down from this triangle since it entered it in a downtrend but take that with a grain of salt.
The fib confluence of 1.5274/64 lends support to the idea that Cable might be settling into a trading range between 1.5297 and 1.6300. This, too, would suggest the next move would be down. Everyone has eyes on resistance of 1.6300. If price fails again in this range, selling will come into play.
If price does successfully overtake and settle above 1.6300, then 1.6461/1.6500 and 1.6878 come into play. My money is on the bears but be careful with this pair and use tight stops.
Here's a 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.
The fib confluence of 1.5274/64 lends support to the idea that Cable might be settling into a trading range between 1.5297 and 1.6300. This, too, would suggest the next move would be down. Everyone has eyes on resistance of 1.6300. If price fails again in this range, selling will come into play.
If price does successfully overtake and settle above 1.6300, then 1.6461/1.6500 and 1.6878 come into play. My money is on the bears but be careful with this pair and use tight stops.
Here's a 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.
EURUSD—three-hour chart
I'm still long from 1.3517 and Euro is behaving in line with my analysis yesterday. On the 3-hour chart, this looks as though it's leg c of a three wave abc correction which I wrote could carry it to around 1.3670. The high so far this morning is 1.3667, fib confluence and polarity.
There's a good chance this little rally could achieve 1.3727 (.618 of the move down from 1.3862 to 1.3509). At this point, I'd be looking for signs of failure to find a position that put me back in synch with the overall downtrend. However, if they don't exist and price closes above 1.3727, I'd look for another run to 1.3862. Where I'd short for sure.
If the pair should reverse downwards, expect initial support at 1.3509 and fib confluence of 1.3485/81 (.382 of 1.2874 to 1.3862 and .382 of the move up to 1.3862 from 1.3255). After that is 1.3361 and if that broke then 1.3244.
Here's the three-hour 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.
There's a good chance this little rally could achieve 1.3727 (.618 of the move down from 1.3862 to 1.3509). At this point, I'd be looking for signs of failure to find a position that put me back in synch with the overall downtrend. However, if they don't exist and price closes above 1.3727, I'd look for another run to 1.3862. Where I'd short for sure.
If the pair should reverse downwards, expect initial support at 1.3509 and fib confluence of 1.3485/81 (.382 of 1.2874 to 1.3862 and .382 of the move up to 1.3862 from 1.3255). After that is 1.3361 and if that broke then 1.3244.
Here's the three-hour 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.
Subscribe to:
Comments (Atom)