FX.co ★ Technical analysis and trading recommendations for EUR/USD for July 9, 2010

4-hour timeframe

Overview:
The formed ‘buy’ signal with the target level of 1.2620 is going on. The signal is strong and confirmed as the price is placed above Ishimoku cloud and Chinkou span is above the price curve. Also, the price is above the target level of 1.2620, therefore, the next target is the first resistance level of 1.2735. In addition, it should be noted that the price has reached the target level and in the closest time a reversal is probable to take place. The correction, signaled by Ishimoku lines, was not deep, which spoke for the trend strength. If the price fixates below Kijun-sen, the ‘buy’ signal will weaken. In case of the price fixing above the first resistance level, the new target of the rising motion will be at 1.2904, the second resistance level. Chinkou Span is positioned above the price curve testifying to bullish sentiment. Bollinger bands show a probable start of new upward motion – the bands are slightly diverging and up-directed. MACD is moving up speaking for the continuation of increasing movement.
Trading recommendations:
In these circumstances, it is recommended to bull, as there are no signs of reversal. The target is at 1.2735. Place stop loss below 1.2595.
Except the 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.