22, February 2013

EUR/USD (a 4-hour chart)

EUR/USD (a 4-hour chart)

General overview

Yesterday, the pair continued its falling. The price could not work out a "golden cross" and consolidated below the Kijun-sen. We have a strong and proven signal to sell. The Chinkou Span is below the price and the price itself is located below the Ichimoku cloud.

The purpose of the downward movement is the support level 1.3168. The price tested it yesterday and has bounced from it to 1.3221. While the price is below the Kijun 1.3296 we will have a downward movement. If the price consolidates above this level a sell signal will weaken and a correction or an upward movement may start.

While the Chinkou Span is below the price chart we stand for a downward movement.

Bollinger bands are expanding and directed downwards. Therefore we confirm that short positions are relevant now.

MACD indicator is at the bottom confirming the downward movement as well. Should the indicator turn that will be signal for a correction or a change of direction.

Trading recommendations

It is recommended considering short positions. The first goal of the downtrend is 1.3168, after working out this level the price will move further to the level 1.3125. At the moment, the euro continues to go down. The targets for the downward movement are levels 1.3221 and 1.3168.

Stop loss should be set below the Kijun-sen (1.3296) As the price goes down we should take the level of stop-loss after it.

Having achieved a profit of 20-30 points stop loss can be moved to a breakeven. The best place to place take-profit is a bit below the target levels.