11, February 2013

EUR/USD (a 4-hour chart)

EUR/USD (a 4-hour chart)

General Overview

Forex market analysis on euro for February 11th shows that the price continued «a dead cross» and jumped out of the Ichimoku cloud. As a result a downward movement continued. The current sell signal is confirmed and strong as the Chinkou Span is below the price chart and the price is below the Ichimoku cloud. For the current moment the goal of a downward movement is the second level of support – 1,3290. If the price fixes below that target a downward movement will continue with the next goal which is the third level at 1,3168.

The downward movement will be actual as long as the price is below the Kidjun-sen (1.3474). If the price consolidates above this line the sell signal will be weakened and that will question the downward movement and an upward movement can be started.

The Chinkou Span is below the price chart that is a confirmation of the current sell signal, indicating a bearish mood of traders.

Bollinger Bands shows the continuation of the downward movement, the bands are extending and heading downwards. As a result, we stay for short positions now.

MACD is down that indicates the downward movement. Should the indicator turns up that could be a signal for a short term correction. We will receive another signal for correction when the price bounces from the level at 1,3290.

Trading recommendations

On EUR we recommend to consider a downward trading with the first target – 1,3290. When overcoming this target short position become actual for the level – 1,3168. Stop loss we place above the Kidjun-sen 1.3474 and when this line goes down we can move the stop-loss after it.

When we get profit of 50 - 60 points stop-loss can be moved to a breakeven. If MACD turns upward or the price rebounds from the level at 1,3290 you can manually close short position. Take-profit can be set slightly above the target levels at 1,3300 and 1,3175.

Apart from the technical picture it is necessary to consider the fundamental data and the time of its release.

In case front-running deals are possible, you can take a smaller timeframe (M15-M30) and follow the reversal of the trend indicator (Heiken-Ashi, for example) near the price level where the price reversal will probably take place.