FX.co ★ The technical analysis and trading recommendations for USD/CHF pair for the period 27.07 – 31.07

Day timeframe

Ishimoku:

On the basis of this interpretation, we see the lateral movement, however, there are some signs of downward trend outset. The price is below Tenkan-Sen and Kidjun-sen. Tenkan-Sen reversed and down-directed signaling about the downside motion. At present, the descending movemnet is possible, as Tenkan-Sen and Kidjun-sen have formed the sell signal. That is why this direction will be on topic until it is below Kidjun-sen and Tenkan-Sen is down-directed. Kidjun-sen turned out and moved downwards showing that the descending trend still has some prospects. The sell signal was formed and affirmed by Chinkou Span, so the most indicators signal about possible downside movement start-up. For now it is recommended to increase the short positions at least to the bottom Bollinger band, afterwards, in case of its break through can be considered the down-going tendency. Presently, Tenkan-Sen and Kidjun-sen lines appeared to be the resistance for the current movement. In case the price fixes above Kidjun-sen, the descending trend will be put into question and the probability of the current signal cancellation will be rather high. Also, the resistance level for the price is the Ishimoku cloud bounds. The Ishimoku cloud is continuing its downward motion and narrowing slightly, signaling about possible downward trend closing, as well as Chinkou Span which is below the graph. The near term price target is at the bottom Bollinger band, after that in case of a break through will be opened the gates for the falling course.

Bollinger Bands:

This indicator shows the lateral movement. The lines narrowed and directed sidewards. As we can see, the price jumped off from the middle Bollinger band, signaling about a possible downward trend continuation. The downside motion can be considered in case the Bollinger bands are down-directed. In a short term is also probable the sideward motion within the Bollinger bands range, in case of its break through may start the trend dynamics. Consiquently, it is better to wait for this break through to determine the trend direction.

MACD:

This indicator shows the present sideward movement — neither the signal line, nor the hystogram go up or down. As it was said above, presently, there is a high probability of flat motion, it is recommended to wait for the movement to begin.

Trading recommendations:

The GBP/USD currency pair will possibly extent the lateral trend. That is why it is a good practice to begin trading amid break through of upper and bottom Bollinger bands and this movement confirmation by Ishimoku. In case of step away from the upper and bottom lines you may trade on the jump off with the first target — the middle Bollinger band and further to the opposite bound. Presently, is seen the most probable scenario with a break through of the upper Bollinger band and the purchase signal formation from Ishimoku.

The picture clarification

Ishimoku indicator:

Tenkan-sen — red line
Kidjun-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

Have a good trading

July 27, 2009

Stanislav Polianskiy