15, February 2013

EUR/USD (a 4-hour chart)

EUR/USD (a 4-hour chart)

General Overview

Forex market analysis tells us that the price finished a lateral moving and continued its downward falling. The price is in the channel between Tenkan-Sen and Kijun-Sen now. The market is looking bearish.

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 level 1.3327 which has been tested but has not overcome. If the price consolidates below this support zone the downward movement can proceed to the second level of support 1.3259.

The downward movement will be strong as long as the price is below the Kidjun-sen (1.3415). If the price consolidates above this critical line we can expect the price to move upwards.

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 are windening, its lines are directed downwards confirming the current sell signal. The price is angling down and the correction is over.

MACD is still down and indicates the downward movement. Should the indicator go up or the price bounces up from 1.3350 that could be a signal for another correction. On another hand if the price pullbacks down from this level the downward movement will be preceded.

Trading recommendations

We advise to consider a downward trading with the first target 1.3327. When overcoming this level short position become actual to the next one 1.3259.

Stop loss is to be placed above the Kidjun-sen 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 new orders on sale if MACD turns up or if the price rebounds from 1.3350 level.

Take-profit can be set slightly above the target levels.