03, June 2014

EUR/USD (a 4-hour chart)

EUR/USD (a 4-hour chart)

General overview

There was only a little of Euro zone economic data yesterday and its results did not show optimism. The Spain and Italy inflation reports showed a price slowdown in May. It could give rise to believe the market to maintain the trend throughout the region which increases the possibility that the ECB will launch the new measures to fight a deflationary process and does not support the Eurozone single currency at all. The German retail sales in April recalled similar negative emotions as the index fell more than it was expected.

The strong support 1.3680 breakthrough led to the active single currency falling against the U.S. dollar. The euro was virtually losing ground the entire month, but the sellers had not the volumes support for the last two weeks. The price moves down to a strong support level 1.3575 by inertia.

The price is finding the support at 1.3570. The price is finding the first resistance at 1.3610, the next one is at 1.3670.

There is a confirmed and strong sell signal. The price is under the Cloud and it is under the Chinkou Span. The downtrend movement will be until the price is under the Kijun-Sen. The Kijun-Sen is directed horizontally. The Cloud is descending.

The MACD indicator is in negative territory. The histogram is close to the zero level.

Trading recommendations

Please be advised to go short to 1.3570. If the price consolidates below the first target it will go to 1.3520. The volumes support the decrease.