FX.co ★ Technical analysis of EUR/USD for June 29, 2010. Trading recommendations

4-hour timeframe

Overview:
Unexpectedly, the ‘buy’ signal with target level of 1.2519 weakened. The price fixed below Kijun-sen, did not overcome Ishimoku cloud and Chinkou Span fixated below the price curve. All of this significantly weakened the ‘buy’ signal. Now, for further trading we should wait for either the current signal strengthening (the price fixation above Ishimoku cloud) or the formation of new ‘sell’ signal. If the price fixes above Ishimoku, target will be the first resistance level of 1.2498. In case of formation of ‘sell’ signal the first intermediate target will be the second support level of 1.2079. Chinkou Span is placed below the price curve which testifies to bearish sentiment. Bollinger bands indicate sideways movement – the bands are not diverging and directed sideways. MACD is lowering that signals about falling motion.
Trading recommendations:
In these circumstances, it is advisable to wait for situation clearance. For sales, wait for a ‘sell’ signal from Ishimoku, for purchases – the current signal strengthening and the price fixation above Ishimoku cloud.
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.