27, March 2013

EUR/USD (a 4-hour chart)

EUR/USD (a 4-hour chart)

General overview

The sudden fall of the euro is the investors’ reaction to the words of the Eurogroup president. He said that the measures applied to Cyprus can be used for other EU countries. The pair could not hold its positions and fell reaching a new low 1.2830. Where it is located at this moment.

The sell signal is strong and confirmed. The Chinkou Span and Kijun-Sen are above the price chart, the pair is being traded below the Ichimoku cloud. Everything suggests a bearish mood of traders.

The pair keeps falling, the current target is the level 1.2840, tested, but not consolidated. If the price is fixed at this level, the downward movement may continue to level 1.2760.

The downward movement will be relevant as long as the pair is trading under the cloud.

Bollinger bands show the downward movement. The bands are broadening.

MACD is in the negative zone and started to go down.

Trading recommendations

Pair showed a rapid decline when falling it broke not one important support level: 1.3000, 1.2950, 1.2910, 1.2875. There is a small possibility of growth and a return to the downward movement, with the testing of new local minimum. The expected values in the short term: 1.2750, 1.2700.

We recommend to open short positions. The pair returned to the downward movement. Indicators and graphical analysis suggest continuation of the downward trend.

We forecast a correction, which usually follows such a sharp fall. The price will approximately go to the level 1.2900 to continue falling from it.

In case of return to the downward movement the first goal will be 1.2840 where the pair must consolidate its positions at first. The second goal is the level 1.2760.

Place a stop loss above 1.3940 Kijun-sen and as the price goes down move and stop level as well.

When you open positions consider the fundamental analysis and the time of its release as well.