FX.co ★ EUR/USD's technical analysis and trading recommendations for August 2, 2010

4-hour timeframe

Overview:
The purchase signal with the target level at 1.3250 keeps on. This signal is strong and confirmed as the price is placed above Ishimoku and Chinkou Span is above the price curve. Also, the price managed to fixate above the pivot level of 1.3011. Therefore, the current target of the rising motion is the first resistance level of 1.3145. If the price overcomes this level, next target will be 1.3240, the second resistance level. If the price fixates below Kijun-sen (1.3028), it will mean the ‘buy’ signal weakening and it is better to close long positions. Chinkou Span is positioned above the price curve that means that an upward movement is preferable. Bollinger bands indicate a weak ascendant motion – the bands are slightly diverging and up-directed. MACD is rising, but also quite easily. This upward tendency is weak and can end at any minute.
Trading recommendations:
This situation is advisable to bull with the target at 1.3145. Stop loss to set below 1.3028.
Apart from the technical picture, it is important to consider the fundamental reports and time of their release.
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.