26, December 2013

EUR/USD (a 4-hour chart)

EUR/USD (a 4-hour chart)

General Overview

The market is anxious – the Fed decided to reduce the volume of QE3 nevertheless at the end of the year. Since January 2014 the program will be cut by 10 billion dollars, and the regulator will continue monthly to buy assets totaling 75 billion dollars. Eurodollar reacted quite volatile on this decision and showed a “swing”, touched both “bearish” and “bullish” stop-orders.

Short-term outlook still looks negative; it is expected the fall to the support at about 1.3490–1.3530.
In the future if the pair stays above 1.3490–1.3530 support, a growth is likely to recommence in order to overcome the resistance 1.3830 and then to test the level 1.4000.

The current sell signal is weak and confirmed as Chinkou Span is below the price and the price has just left the Ichimoku cloud.

Falling will be continued until the Kijun-Sen is located above the price. The trend lines cross each other, the Tenkan Sen is directed downwards, Kijun Sen is horizontal.

Bollinger Bands shows a continuation of the downward movement, the bands are directed down.
MACD histogram is located in a negative zone and it is above its signal line.

Trading recommendations

The Euro tested the zone of the lower border of the channel at the level 1.3623, but rolled upwards and is trading now in the local sideward movement with the correctional channel 1.3621–1.3694, the boundaries of which determined levels of the key market at the beginning of a trading session of a week.

One more retest of trend or of the resistance level 1.3700 is possible. If the price fails to break above 1.3710 there will be a rebound to the support level 1.3620.