EURUSD is in a bearish trend. Price is below the Ichimoku cloud (Kumo) and continues making lower lows and lower highs. As we explained in our last analysis, EURUSD is trapped inside a bearish channel and as long as it remains inside it, bears will remain in control of the trend. Today we use the Ichimoku cloud indicator to identify key resistance levels.
Using the 4hour chart we see as the most important resistance level the 1.1725-1.1765 area where the Kumo is found. Price is trading below both the tenkan-sen (red line indicator) and the kijun-sen (yellow line indicator). This confirms bearish trend. The tenkan-sen provides resistance at 1.1672 and the kijun-sen at 1.1695. Bulls need to see 4 hour candlestick closing above these levels in order for a bigger bounce to be expected. The Chikou span (black line indicator) is also below the candlestick pattern confirming the strength of the bears. So far there is no reversal signal given. The first hint of a possible reversal will come if price makes a 4 hour close above the tenkan-sen.
