FX.co ★ EUR/USD Technical Analysis and Trading Recommendations for October 25, 2011

4-hour Timeframe

Overview:
According to the Forex market analysis for October 25, we might consider current movement as a slight upside movement, in this case up trading is possible. The formed sell signal is strong and confirmed, since the Chinkou Span fixated above the price graph and the price is above the Ichimoku cloud. At the moment the first target is 1.3988 – the first resistance level. If this level is passed the second target will be the second resistance level at 1.4081. Upside movement remains while the price is above the Kijun-sen (1.3805), if the price fixates below this line it will denote possible end of upside movement and a signal to cut long positions. The Chinkou Span is above the price graph, which confirms the buy sell signal and indicates bullish sentiment. The Bollinger bands show beginning upside movement, the lines are diverging and directed up. The MACD is ascending, which indicates current upside movement, in case the MACD reverses down we should close long positions.
Trading recommendations:
Currently it is recommended to trade up with target at 1.3988 and further to 1.4081. Stop Loss should be placed below 1.3805 and stretched down as the Kijun-sen increases. It is recommended to cut buy positions after the MACD reverses down.
In addition to technical image, one should take into account the fundamental data and the time of their release.

The chart annotation:
Ichimoku 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 white bars in the indicators window.