22, October 2013

EUR/USD (a 4-hour chart)

EUR/USD (a 4-hour chart)

General Overview

Euro managed to take advantage of the strengthening of risk appetite due to the medium-term resolution of the U.S. fiscal impasse, and make significant progress towards the annual maximum ( $ 1.3710 - 1 February ) against the U.S. dollar by the end of the week reaching 1.3704 on October 18. In addition, the policy of the Central Bank was more favorable for the euro.

EUR/USD was being traded conservatively with the start of a new week on the background of a large number of delayed data from the U.S.. In Tokyo, the pair could not break through 1.37 (maximum of 28 January). However, the bulls continued to dominate against the Bears, suffered a massive dollar sell- off due to the U.S. government and the question on the debt ceiling, which will be decided next year.

The pair is in a bullish trend. Chinkou Span is above the price, and the price is fixed inside the Ichimoku cloud, the buy signal is strong and confirmed.

The upward movement will remain until the 1.3585 level which is Kijun-sen is located below the price.

Trading recommendations

Before the rebound, the price may go up again to the angled line resistance 1.3700. In the case of an unsuccessful retest we can expect a corrective decline to the nearest support level located at 1.3630.

If the approach to 1.3630 would be accompanied by an increase in trade volume we can expect a breakthrough of the next potential target - 1.3600.