29, March 2013

EUR/USD (a 4-hour chart)

EUR/USD (a 4-hour chart)

General overview

The pair showed a weak upward movement yesterday, rising slightly above the local minimum which was updated yesterday.

Bulls are cautious, but the market is ready to meet them with some enthusiasm which gives hope for a continuation of a bullish activity.

The growth of the euro was a surprise, its reason the poor statistics from Germany and not resolved situation around Cyprus.

As we can see the pair was in a correction yesterday. 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 the level 1.2680.

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

Bollinger midline confidently decreases. Price range gradually broadens.

MACD is ready to form a buy signal. The histogram slows its decline, but its growth has not started yet. It is recommended to wait for more clear signals to enter the market.

Trading recommendations

The pair is likely to show flat dynamics in the nearest future. Though the pair just started to grow but it is early to speak about the change of the trend.

Long positions can be opened after a steady breakdown of the level 1.2900 followed by a rebound from it as from the support.

An alternative may be the selling after the confirmed breakdown of the next key support levels, for example 1.2760.

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.