FX.co ★ EUR/USD technical analysis and trading recommendations for 28/09/2010

4-hour timeframe

Overview:
Buy signal is continuing with a target at 1.3064. This is a strong and confirmed signal as the price fixed above the Ishimoku cloud and the Chinkou Span is above the price curve. The target level has been already passed, however, the signs the upward movement is over are not observed. Alongside, the price managed to fix above the pivot level of 1.3337, thus indicating the next target of the movement at 1.3647 – the first resistance level. The price did not fix above the first resistance level. In case the first level is overcome, the next target will be 1.3803 – the second resistance level. If the price is below the Kijun-Sen (1.3380) that will denote the weakening of the current signal and the point to reduce long positions. The Chinkou Span is above the price chart, which is a confirmation of the current buy signal. The Bollinger Bands show the upward movement, the lines are diverging and directed upside. The MACD is descending thus demonstrating the current downward correction.

Trading recommendations:
Currently, it is recommended to trade long with the target at 1.3647. Stop-loss is set below 1.3380. If the MACD reverses up, we enter the market.

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.