14, October 2013

EUR/USD (a 4-hour chart)

EUR/USD (a 4-hour chart)

General Overview

Long standoff over the US debt could hurt the global economy, said the President of the European Central Bank, Mario Draghi on Thursday.

EUR/USD closed the American session at 1.3525. We will have a bullish untill the price remains at this level or above it. However, the daily chart also shows that the support line was broken several times in the beginning of the week. Still the support at 1.3480 still hold the attack bears, the pair have the possibility to test the top on the background of broken bear hopes.

The current sell signal is strong and confirmed, as Chinkou span is below the price chart and the price is below Ishimoku cloud.

The downward movement remains until the price is below the Kijun-sen (1.3540)

Bollinger bands show a continuation of the downward movement.
MACD is directed upwards indicating the current correction.

Trading recommendations

We have a reversal pattern «double top» that is formed above the strong level of support 1.3550. The breakthrough of 1.3550 down was a good signal to start working out the tops.

To continue the downward trend, the price needs to break below the support line 1.3490 and the resistance level 1.3470, thus opening the path to 1.3440 and 1.3400.