Last week was a bad one as the EurUsd started correcting from the spiral of death. As I write this, the account is down $3,358.50 or 51.80% from the close of the week before last one.
I did not stop the loss sooner, nor have I stopped it yet, because I want to test something. Right now I am using the 21-day EMA as a resistance level for the EurUsd. The last time the EurUsd tested the 21-day EMA was on May 3, 2010 at 1.3376. At that time, the EurUsd was on a steady rise since April 28, 2010, when it opened at 1.3173. After almost testing this 1.3376 resistance level, the EurUsd then plummeted to a low of 1.2521 before attempting another correction on May 7, 2010. It eventually went as high as 1.3093 but before it reached resistance at 1.3150 it dropped to a low of 1.2160 on May 18, 2010. The cycle then repeated itself, three days of gains, reaching a high of 1.2671 on May 21, 2010 before tumbling back down to a low of 1.1876 on June 7, 2010.
On June 8, 2010, the EurUsd started what I hope will be another of its short-lived corrections before it tumbles down a few more hundred points. It opened at 1.1992 and on Monday hit a high of 1.2298. Also on Monday, the EurUsd broke through the 21-day EMA resistance level of 1.2270. However, it failed to close above this resistance level. Had the EurUsd closed above 1.2270, and it still may, I would have been very worried.
On Tuesday, the EurUsd opened at 1.2221 and has already hit 1.2231. The 21-day EMA is at 1.2265, so the EurUsd's current price range is a bit too close for comfort. I am also worried because prior corrections lasted for two or three days. This one has been going on for five days. Maybe the EurUsd has seen its lowest levels and will start ranging for a while before starting a steady climb upwards. So, am holding my breath and making frequent visits to the bathroom as I watch the price action these next two days.
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