FX.co ★ Technical analysis and trading recommendations for EUR/USD for July 20, 2010

4-hour timeframe

Overview:
The upward movement is going on. The ‘buy’ signal with the target at 1.2975 had reached its target and the price slightly rolled back from this level, which determined a correction. The ‘buy’ signal is strong and confirmed, as the price position against Ishimoku testifies to it and Chinkou Span is placed above the price curve. Currently, the price is above the pivot level of 1.2819; therefore, the next target of the upward motion is the first resistance level of 1.3116. However, the correction is not finished yet judging by MACD and it can develop into a falling trend. Therefore, in case of MACD reversal upwards the rising motion continuation with the mentioned target is very likely. If the price fixes below Kijun-sen (1.2840), the current purchase signal will weaken and the upward trend is likely to end. Bollinger bands are converging and up-directed. That can be a signal for the increasing tendency final. MACD is lowering, showing the current downward correction.
Trading recommendations:
For the existing situation, it is recommended to bull with the target at 1.3116 after MACD up-reversal (or another signal about the uptrend refreshment). Stop loss to place below 1.2840.
Besides the technical picture, the fundamental reports and time of their release should be taken into account 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.