Tuesday, July 5, 2011

EUR/USD Technical Analysis & Trading Recommendations


Overview: Forex market analysis for July 5 shows that at the moment the currency is still observing a buy signal with target level 1.4639, therefore it is recommended to consider long positions. The formed buy signal is strong and confirmed, since the Chinkou Span fixated above the price graph and the price is above the Ichimoku cloud. At the moment the first target is 1.4683 – the first resistance level. If this level is passed the second target will be the second resistance level at 1.4842. Upside movement remains while the price is above the Kijun-sen (1.4405), if the price fixates below this line it is recommended to cut long positions. The Chinkou Span is above the price graph, which confirms the current buy signal and indicates bullish sentiment. The Bollinger bands show possible end of the upside movement, the lines are narrowing and directed up. The MACD is descending, which indicates current correction movement, this filter does not allow us to trade up now, but the MACD reverses up it will denote the resumption of the uptrend.

Trading recommendations:

Currently it is recommended to trade up with target at 1.4683 and further to 1.4842. Stop Loss should be placed below 1.4405 and stretched up as the Kijun-sen advances. Iit is recommended to open long positions after the MACD reverses up.

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. 

4-hour timeframe


Performed by Stanislav Polyanskiy, Analytical expert
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