25, October 2013

EUR/USD (a 4-hour chart)

EUR/USD (a 4-hour chart)

General Overview

The European Central Bank is preparing forces for an annual audit of the large euro-zone banks, so that they can withstand the crisis. The ECB said that the inspections would begin next month to check balances of 124 euro zone banks to "stress tests". ECB will be the leader of the sector at the end of next year, a multilateral response of the euro zone block to the debt crisis.

The single currency is back to the highs of the week around 1.3780/90. The EUR/USD remains remarkably stable near the 1.3800 key barrier. Probability of a break above 1.3800 remains before the release of PMI manufacturing and services in the euro area, and the consensus points to a continuation of the recent optimistic results.

The bulls continue to dominate against the bears. The pair is in a bullish trend. Chinkou Span is above the price, and the price is fixed above the Ichimoku cloud, the buy signal is strong and confirmed. Tenkan-Sen and Kijun-sen are directed upwards. The Cloud is growing.

The upward movement will remain until the Kijun-sen is located above the price.

Trading recommendations

Growth will be continued after the bears manage to break below the 1.3715 inclined support line 1.3770. The next target is 1.3860.