Wednesday, July 13, 2011

EUR/USD Technical Analysis & Trading Recommendations

4-hour timeframe





Overview:
 
Forex market analysis for July 13 shows that at the moment the currency is still observing a sell signal with target level 1.4310, the target level was reached by the price, however, downside movement remains. The formed sell signal is strong and confirmed, since the Chinkou Span fixated below the price graph and the price is below the Ichimoku cloud. At the moment the first target is 1.3984 – the second support level, however, downside trading should be started below this level. If this level is passed the second target will be the second resistance level at 1.3756. Downside movement remains while the price is above the Kijun-sen (1.4100), if the price fixates above this line it is recommended to cut short positions. The Chinkou Span is below the price graph, which confirms the current sell signal and indicates bearlish sentiment. The Bollinger bands show possible downside movement, the lines are diverging and directed down. The MACD is ascending, which indicates current correction movement, this filter does not allow us to trade up now, but the MACD reverses down it will be a signal to open short positions again.
 
Trading recommendations:
 
Currently it is recommended to trade down with target at 1.3756 and further to 1.3984 and 1.3521. Stop Loss should be placed above 1.4100 and stretched down as the Kijun-sen declines. It is recommended to start up trading after the MACD reverses down.
 
In addition to technical image, one should take into account the fundamental data and the time of their release.

The chart annotation:
 
Ichimoku indicator: Tenkan-sen — red line
Kijun-Sen — blue line
Senkou Span A — light brown stipple line
Senkou Span B — light purple stipple line
Chinkou Span — green line
Bollinger Bands indicator: 3 yellow lines
MACD indicator: The red line and the histogram with white bars in the indicators window.

Performed by Stanislav Polyanskiy, Analytical expert
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