24, May 2013

EUR/USD (a 4-hour chart)

EUR/USD (a 4-hour chart)

General overview

The U.S. dollar showed a high volatility during yesterday's Ben Bernanke's speech.

Rumors that the FED may take tough measures against monetary policy increased. The FED chief said that the country's economy had overcome a lot of obstacles on the way to a recovery, but still remained vulnerable and a possible reduction in the asset purchase program may cause the risk of stopping the economic growth.

The key resistance level 1.2910 turned out to be a tough barrier for the pair and the euro/dollar stopped all attempts to further growth so far. We believe that the EUR/USD will remain in the 1.29 area at the moment.

The price is trading upper than Chinkou-span, we have a strong buy signal. EURUSD is trading in the Ichimoku cloud. The pair is above the Kijun and Tenkan, the Ichimoku cloud has a down trend formation.

Bollinger bands are turning up following the price.
MACD is now at zero line. Should the indicator turn down it will signal a resumption of a falling, if up a resumption of a growing.

Trading recommendations

We can see a head and shoulders on the daily/weekly charts. Bears wait for a break below the 1.2770 which is expected to lead to a new wave of aggressive euros selling, opening the way to the 1.2680 initially and then to 1.24.

Should the pair continue to go down it will set its way to the level 1.2800 at first, after consolidation it will go to 1.2760.