4-hour timeframe
Overview:
The pair is extending its downside movement with frequent corrections, which has probably turned into sideways movement. The formed sell signal has target level of 1.2966. This signal is strong and confirmed since the Chinkou Span fixed below the price graph and the price managed to fixate below the Ishimoku cloud. But, as mentioned before, correction movement is continuing, therefore it is not recommended to trade down until it ends. In addition the price fixated below the Kijun-Sen, which weakened the current signal; therefore it is not recommended to trade yet. The first target for the downside movement is 1.3047 – the first support level. If the first support level is passed the next target will be the second support level of 1.2907. The Chinkou Span is below the price graph, thus confirming the current sell signal and indicating the bearish sentiment. The Bollinger bands show either possible completion of the downwards movement or a prolonged correction, the lines are not diverging and directed sideways. It is recommended to resume trading after the lines start to diverge again. The MACD is ascending, thus pointing to the current correction movement.
Trading recommendations:
Currently it is recommended to trade down with the target to 1.3047, in case this level is passed the target will be 1.2907. Stop Loss should be placed above 1.3127. Short positions should be opened only if the MACD reverses down, Bollinger bands start to diverge and the Kijun-Sen is passed.
In addition to technical image, one should take into account the fundamental data and the time of their release.
The chart annotation:
Ichimoku 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 white bars in the indicators window.
