28, March 2013

EUR/USD (a 4-hour chart)

EUR/USD (a 4-hour chart)

General overview

Investors do not much trust the European currency that's because it is not stable. The pair is not stable and weak. We can see it if we look at its latest fall when the pair could not recover from it and continued falling.

All investors' fears are justified as depositor banks in Cyprus are still frozen, as soon as the banks are open and people get access to their savings it might happen a rapid outflow of the capital. Cyprus will have to input a quota on withdrawal.

Running through standard Ichimoku check-list we can see that the pair keeps falling. 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 supports a bearish mood of traders.

The pair keeps falling, the current target is the level 1.2760 which is tested, but not consolidated. If the price is fixed at this level, the downward movement may continue to level 1.2680.

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. It is recommended to go short.

MACD is in the negative zone and is going down.

Trading recommendations

If we see a weak economic in the nearest future it will put pressure on the pair and it is most likely that the currency will fall against the dollar even lower: 1.2760, 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.

The first goal of the downward movement is 1.2760 where the pair must consolidate its positions at first. The second goal is the level 1.2680.

Place a stop loss above 1.2940 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.