FX.co ★ Technical analysis of EUR/USD for June 25, 2010. Trading recommendations

4-hour timeframe

Overview:
As we predicted yesterday, the price did not entered Ishimoku cloud immediately, it had rolled back to Kijun-sen. The formed ‘sell’ signal with the target level of 1.2050. Now, the signal is beginning to gain momentum and Chinkou Span has already fixated below the price curve, the price has reached Ishimoku and slowed down. And now, the most possible variant will be a reversal and refreshment of decreasing movement. MACD will signal about reversal. Otherwise, the price will fixate above Kijun-sen that will weaken current signal and will make downward movement questionable. In the closest time, it is recommended to consider short positions with targets at 1.2155 (Senkou Span B) and 1.2050 (target level). If the price fixes above Kijun-sen, it will weaken the current signal and short positions should be closed. Chinkou Span is situated below the price curve that signals about bearish sentiment. Bollinger bands indicate the ending of downward motion – the bands have converged and are directed sideways; however, as most likely we have observed correction, the falling movement will renew and we do not need to wait for the bands diverging. MACD is rising up testifying the correction continuation.
Trading recommendations:
In these circumstances, it is advisable to bear with targets at 1.2155 and at 1.2050. Enter the market only after a down-reversal of MACD or after a signal about falling motion renewal on a smaller timeframe. Stop loss to set above 1.2350.
Besides technical picture, fundamental reports and time of their release should be considered also.
The chart annotation:
Ishimoku 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 the white bars in the indicators window.