04, February 2013

EUR/USD (a 4-hour chart)

EUR/USD (a 4-hour chart)

General overview

Examining the Daily EUR/USD chart we can see that the pair has worked out the second resistance level 1.3615 and consolidated above it. So, we think that an upward movement shall continue.

The current buy signal is confirmed and strong as the Chinkou Span entrenched above the price chart and the price is above Ichimoku cloud.

The pair continues to go higher to 1.3751. Should the price overcome this level it should go for the next one which is 1.3915.

The upward movement will be strong as long as the price is above the Kijun-sen (1.3633).
If the price consolidates over that line that shall weaken the current signal to buy and shall question the further upward trend. As the result the price shall move back to the Ichimoku cloud.

The Chinkou Span is above the price chart that only confirms the bearish signal.

Bollinger Bands shows continued an upward movement, the bands continue to expand and fo upwards that suggests that the trend will continue going up.

MACD is going up as well, indicating that the current uptrend. Should MACD turn down that will be a signal for a possible correction. If the price pullbacks from 1.3615 level that could also trigger the downward correction.

Trading recommendations

We think that the price will continue going up, the bearish trend will be on for a while. If the pair goes up we suggest buying with the first target as 1.3751. Should the price overcome this resistance level successfully it should continue going to the next level which is 1.3913.

If you go long we advise you to place Stop Loss below the Kijun-Sen (1.3323). As the price goes up you can move and Stop Loss after it. When gaining profits of 50 - 60 points stop loss can be moved to breakeven zone.

You can also close your orders manually if MACD goes up or the price pullbacks from the support level 1.3615. Our recommendation is to place Take Profit slightly below the target levels – 1.3751 and 1.3915.

When opening orders please be advised to consider fundamental news.