20, December 2013

EUR/USD (a 4-hour chart)

EUR/USD (a 4-hour chart)

General Overview

The single European currency fell on Wednesday versus the dollar. The reason of falling is the FED's decision to cut the incentive program. Before the report the euro was multidirectional consolidation because data on its own economy were used to give mixed results.

The pair could not overcome the resistance 1.3830 and has fallen sharply. At the moment its short-term future look negative. We expect a further decrease to the support at 1.3490-1.3525.

If the pair stays above 1.3490-1.3525 the growth is likely to resume and its aim will become again the resistance 1.3830 and 1.4000. However, if the support is 1.3490-1.3525 passed, the falling will be continued to 1.3300-1.3330.

We have a confirmed and weak sell signal as Chinkou Span is below the price and the price is within the Ichimoku cloud.

The downward movement is kept as long as the price is below the Kijun-sen. The trend lines are directed downwards.

Bollinger bands show the beginning of a downward movement.

MACD histogram crossed the zero line downwards, it is located now in the negative zone, below its signal line.

Trading recommendations

The pair fell to the upward trend line 1.3660 which then broke down .

We see a short-term correction to 1.3660 trendline. It is likely that the trend reverse break -up will not happen and the price will rebound with a further continuation of the downward trend. The immediate target is 1.3620.

The break of 1.3620 will open the way to 1.3550 and 1.3520.