12, February 2013

EUR/USD (a 4-hour chart)

EUR/USD (a 4-hour chart)

General Overview

Forex market analysis on euro for February 12 shows that the price works out «a dead cross» on Monday and continued the downward movement. The current sell signal is confirmed and strong as the Chinkou Span is fixed below the price chart and the price is below the Ichimoku cloud.

Now the goal of the downward movement is the second level of support 1,3350 which has been tested but has not overcome. If the price consolidates below this target the downward movement can proceed to the second level of support 1,3290.

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

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. We suppose that short positions are more relevant on the market now.

MACD is down and indicates the downward movement. Should the indicator go up or the price bounces up from 1.3397 that could be a signal for a correction.

Trading recommendations

We advise to consider a downward trading with the first target 1,3350. When overcoming this target short position become actual to the next one – 1,3290.
Stop loss is to be placed above the Kidjun-sen 1.3474 and when the price goes down, you can move the stop loss after it.
When we get profit of 50 - 60 points stop-loss can be moved to a breakeven. You can open a new orders on sale if MACD turns up or if the price rebounds from 1,3397 level. Take-profit can be set slightly above the target levels – 1,3360 and 1,3300.