4-hour timeframe
Overview:
It seems the sideways movement has started, at least the Bollinger bands indicate it. New sell signal without the target formed. This signal is strong and confirmed, as the Chinkou Span strengthened below the price chart and the price fixed below the Ishimoku Cloud. However, if to look at the chart we can see that the price did not fixate below the cloud, but the cloud itself converged here, so it cannot be considered as intense strengthening. Until the current signal starts strengthen it is not recommended to trade. In case the Bollinger bands diverge down then the first target of downwards movement will be 1.3118 – the first support level. If the first support level is passed, the next target will be the second support level of 1.3012. The downside movement is still observed, until the price is below the Kijun-Sen (1.3280), if the price strengthens above this line then short positions should be closed. The Chinkou Span is below the price curve, thus confirming the current sell signal. The Bollinger bands show sideways movement, the lines are converging and directed sideways, thus indicating the current correction. The MACD is descending, pointing to the downside movement.
Trading recommendations:
Currently it is recommended to wait until the signal strengthens, the Bollinger bands should diverge down. You can start trading down with the target to 1.3118 and further to 1.3012. Stop loss is placed above 1.3280.
In addition to technical image, one should take into account the fundamental data and the 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.