07, July 2014

EUR/USD (a 4-hour chart)

EUR/USD (a 4-hour chart)

General overview

The single European currency has collapsed against the dollar as it was under the double pressure. Less strong impact on the euro was provoked by the M. Draghi statements that the regulator is ready for the "unconventional measures" if it appears that the annual inflation rate in the euro area will remain at a low level more than it was expected. The second pressure source had a much stronger impact – the information about the strong jobs growth in the U.S. labor market has caused the European currency sharp falling.

The sellers managed to break below the rising trend line of 1.3610 at the high volume and thereby exit the uplink direction in which the trade lasted four weeks.

The price is finding the first support at 1.3570, the next one is at 1.3520. The price is finding the first resistance at 1.3610, the next one is at 1.3670. We have a strong sell signal. The price is below the Cloud and it is below the Chinkou Span. The Kijun-Sen is directed downwards. The cloud has stooped growing and is changing the direction.

The downward movement will be until the price is below the Kijun-Sen.

The MACD indicator is in a negative territory. The indicator is decreasing.

Trading recommendations

We advise to short with the first target – 1.3570. When the pair consolidates below the first target, we can start a deal to the level of 1.3520.