FX.co ★ Technical analysis and trading recommendations for EUR/USD for June 22, 2010

4-hour timeframe

Overview:
Yesterday, the ascendant movement became open to question. The formed ‘buy’ signal with the target level of 1.2363 has been finished off and has not been canceled yet, however, the price has fixated below Kijun-sen that speaks for the signal weakening. Therefore, in the closest future, it is recommended to close long positions and to get ready for a possible reversal. If the price stays above Kijun-sen again and the current signal keeping on, the rising motion can refresh and in this case the target will be at 1.2498, the resistance level and the signal itself will strengthen. Otherwise, it is advisable to wait for formation of a ‘sell’ signal from Ishimoku. Chinkou Span is above the price curve that testifies to bullish sentiment. Bollinger bands indicate the end of upward movement. The bands have begun to converge and are directed sideways. MACD moves down also indicating decreasing motion.
Trading recommendations:
In this situation, the waiting for either formation of ‘sell’ signal from Ishimoku or the current signal strengthening – the price fixation above Kijun-sen. In the first case, the target will be the first support level of 1.2195, in the second – 1.2498.
Besides technical picture, fundamental reports and time of their release should be considered also.
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.