28, February 2013

EUR/USD (a 4-hour chart)

EUR/USD (a 4-hour chart)

The general overview

The euro is still experiencing the effects of a political instability in Italy.
U.S. Bank stands for the policy that will stimulate dollars.

Technically, the market remained unchanged since Wednesday. The pair is in a correction, working out a "dead cross". The Euro grew to the resistance level 1.3121. In the medium pair climbed. We believe that the price will continue its downward movement after pushing from this level.

The sell signal is strong and confirmed. The Chinkou Span is below the price and the price is below the Ichimoku cloud.

If the price is fixed at the level 1.3121 the downward movement continues. The first goal of the southern movement will be the level 1.3055. If the pair consolidates at it the downward movement will continue to the support level 1.3000.

The downward movement will be relevant as long as the price is below the Kijun-sen (1.3167). Should the price consolidate above this level, the downward movement will be questioned and a correction may begin.

Bollinger Bands suggests continuation of the downward movement. Its bands are going down.

MACD is also at the bottom supporting the idea of the downward movement. Its moving average came out of the main body of the indicator confirming the present correction.

Trading recommendations

Short positions are still valid. The first target is 1.3055. If the pair overcomes this level, the price will go to 1.3000.

Stop Loss should be placed above the Kijun-sen 1.3167.

Do not forget to take into consideration the fundamental data, in addition to the technical analysis before opening orders.