26, February 2013

EUR/USD (a 4-hour chart)

EUR/USD (a 4-hour chart)

General overview

The pair was working out a "dead cross" the whole day yesterday. We have a southern movement. The pair fell through level 1.3180 and 1.3121 yesterday. It stopped at 1.3055 at the end of Monday.

So far, we have a strong sell signal as the Chinkou Span is below the price and the price is below the Ichimoku cloud.

If the price consolidates below 1.3055, the downtrend will continue. The first target will be the level of 1.3000. If a pair manage to entrench below this level, the downward movement will continue to support level 1.2940.

The downward movement will be relevant as long as the price is below the Kijun-Sen (1.3223). Once the price consolidates above this level, the downward movement will be questioned.

The Chinkou Span is lower than the price. That's a strong signal to sell.

Bollinger Bands indicator suggests continuation of the downward movement.

MACD is also at the bottom. If MACD turns up that will be a signal of a possible correction.

Trading recommendations

Now it is the best to open short positions, the first target is 1.3000. If the price is able to overcome this level, it will go to 1.2940.

Stop Loss is advised to place above the Kijun-sen 1.3223.

Do not forget to take into account the fundamental data, in addition to the technical picture to open orders.