4-hour timeframe
Overview:
The euro is still observing the downside movement and a sell signal, the price is still inside the Ichimoku Cloud, which does not allow us to trade either up or down. The formed sell signal is weak and confirmed, since the Chinkou Span fixated below the price graph and the price is inside the Ichimoku cloud. Thus, at the moment the first target for the downside movement is 1.3932 – the second support level. If this level is passed the second target will be the third support level at 1.3814. Downside movement remains while the price is below the Kijun-sen (1.4120), if the price fixates above this line it is recommended to cut short positions. The Chinkou Span is below the price graph, which confirms the current sell signal and indicates bearish sentiment. The Bollinger bands show downside movement, the lines are slightly narrowing and directed down. The MACD is descending, thus indicating current downside movement, if it reverses up this will denote the beginning of a correction movement.
Trading recommendations:
Currently it is recommended to wait until the sell signal strengthens (the price fixates below the Ichimoku Cloud) and trade down with target at 1.3932 and further to 1.3814. Stop Loss should be placed below 1.4120. If the MACD reverses up, it is recommended to cut short positions.
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.
