07, November 2013

EUR/USD (a 4-hour chart)

EUR/USD (a 4-hour chart)

General Overview

The dollar strengthened after Supply Management (ISM) release showed Non-Manufacturing PMI growth. The index rose to 55.4 in October n, n from 54.4 in September, while it was expected a decrease. The euro was being traded downwards. Euro-zone Producer Price Index showed the maximum fall in the growth rate in September since January 2010. Producer Price Index fell by 0.9 % in September, compared with the same month last year, while just 0.8 % decrease was expected.

The pair continues to be traded above the 1.3400-1.3450 support area. The pair has a good chance for a re-growth from current levels to break above the last peak in 1.3830 towards 1.4000. Only a break and sustainable consolidation below 1.3400 will open the way to 1.3100 decline.

The bears dominate on the market. The pair is in a bullish trend. Chinkou Span is above the price, and the price is fixed below the Ichimoku cloud, the sell signal is strong and confirmed. Tenkan-Sen and Kijun-sen are directed down, both lines are horizontal. The Cloud is going down as well.

The downward movement remains until the Kijun-sen is located below the price.

Bollinger Bands show a continuation of a southern movement. The bands are narrowing, being directed downwards.
The MACD histogram is in a negative area, its volumes are reducing.

Trading recommendations

It is recommended to place pending orders for sale from 1.3600 with take-profit at 1.3410-1.3330. Should the pair grow pending orders can be set above with take-profit at the level 1.4000.