FX.co ★ The EUR/USD technical analysis and trading recommendations for October 08, 2010

4-hour timeframe

Overview:
The price advances steadily. Buy signal with the target to 1.3064 continues. This signal is strong and confirmed as the price is above the Ishimoku cloud and the Chinkou Span is above the price curve. The target level has been passed already, however the signs that the uprising movement is over are not observed. Alongside, the price has strengthened above 1.3927 – the first resistance level. That is why the second resistance level of 1.4065 is the next target for movement. If the price is below the Kijun-Sen (1.3795) it will denote the weakening of the current signal and the point to reduce long positions. In case, the price breaches the second resistance level of 1.4065 it will offer the next target to 1.4338. 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 up, thus indicating the possible continuation of the uptrend. The MACD is descending, thus denoting the correction, however, the correction is slight and the uprising movement continues.

Trading recommendations:
Currently, it is recommended to trade long with the target to 1.4065. Stop-loss is set below 1.3795.

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.