29, May 2013

EUR/USD (a 4-hour chart)

EUR/USD (a 4-hour chart)

General overview

The market waits for the retail sales publication in Germany in April. At first it is expected to grow by 0.2%, but after renewing March data we got a decrease by 0.5% instead of 0.3%.

We already know the forecast for non-farm payrolls in May. In April, the number of jobs increased by 165.000, but now it is expected to grow by 163.000. The unemployment rate remained unchanged – 7.5%.

The forecast is favorable for the dollar if the U.S. labor market continues its positive trend this can speed QE3 folding.

Kijun-Sen and Tenkan-sen formed a "dead cross". The price is trading below Chinkou-span, we have a confirmed and weak sell signal as EURUSD is trading below the Ichimoku cloud. If the pair consolidates below the cloud we got a confirmation of a sell signal. The Kijun-sen is horizontal and Tenkan-sen is directed down, the Ichimoku cloud has a down trend formation.

Bollinger bands are narrowing. Should they start broadening that will confirm the present direction.
MACD returned to the falling it is in a zero area now.

Trading recommendations

Yesterday the pair left the cloud. That sets up its movement in the immediate future. If the pair is able to hold its positions under the cloud, the downward movement continues. In this case our first goal is 1.2840. After consolidating at this level the pair will go to 1.2760.

We can also expect a weak movement towards 1.2940 as a correction.