Asian Forex Notes 8/16/2010
1.2830 level continues to control, with the Euro futures below 1.2830 just minutes before the fix, which printed just above. No further strength above 1.2830 ensued, and the CME fix was below the key 1.2830 level, a sustained break above which may portend further upside potential to the 38.2% Fib of the move down from 1.3333 to a test of the key level 1.2730 which held the first try at breaking at 1.2733.
The hourly chart looks like it wants to turn over to Bullish, and may do so over the next eight hour period. Price has held above the Kijun-sen after closing above it at 5AM EST 8/16/10. And remains riding along the 50 period SMA, inside the Kumo. Although it has not done so yet, the Kumo on the hourly looks as if it is about to twist, which would signal a potential trend change on the hourly, and would occur with a close above the Kumo on the hourly.
The 4HR remains bearish with the only sign of strength being three consecutive closes above the Tenkan-sen. Price remains well below the 200 Period SMA, and the Kijun-sen sits right on top of the 38.2% Fi Fib of the move down from 1.3333 to a test of the key level 1.2730 which held the first try at breaking at 1.2733. A close above the Kijun-sen would be a sign of real upside strength.
****Edit: As I wrote this the 8PM EST close of a bar on the 4HR has moved the Kijun-sen below the 38.2 Fib and resides now at 1.2947. I didn't notice when I took the screen shot. ***
I remain bearish, as I am supposed to be trading the 4HR chart, and expect a retest of the 1.2730 level, especially if the Japan equities market is weak, and would expect a break on the first bit of any bad sovereign debt news from the Eurozone.
I hold onto my short which has been Dollar cost averaged to near the Big Fig 1.2800. I should never have exited the short I took at 1.3140 as an exit was against my trading plan. I will hold this short until a clear signal to exit is given on the 4HR, and consider it a continuation trade of the short from 1.3140. Next time I must find the discipline not to exit early in a vain attempt to hunt pips on a lower time frame.
No amount of good analysis can over come bad trading. I am guilty of badly trading this short, and vow publically here to mend my ways.
Attached Image(s) (click to enlarge)
