27, January 2016

EUR/USD (a 4-hour chart)

EUR/USD (a 4-hour chart)

General overview

The IFO indicator has dropped to its lowest level in eleven months which is a negative factor for the single European currency. This indicator is closely correlated with the Germany GDP dynamics, and its negative data is the first wake-up call for the market. The Germany economic growth slowdown is always painful perceived by traders.

We also note the mechanical engineering and the automotive industries rising pessimism, mainly due to low exports.

The first support resides at 1.0800 and then it goes at 1.0730. The first resistance comes in at 1.0925, the next one is at 1.1050.

There is a confirmed and a strong sell signal. The price is below the Ichimoku Cloud and it is under the Chinkou Span. The Kijun-sen is showing a horizontal movement, the Tenkan-sen is heading downwards. The downward movement will be until the price is below the Cloud.

The MACD indicator is in a negative territory. The price is decreasing.

Trading recommendations

The move below 1.0730 will signal the presence of sellers. The price may reach 1.0630 soon. The level of 1.0925 is an obstacle for the pair’s growth. Shall the EUR/USD breaks that level the pair could escalate up to 1.1050.