Technical Analysis EURUSD : 2014-05-29

Good afternoon, dear traders. The sentiment on the Asian trading session today will be determined by the last key news from the U.S. such as Pending Home Sales m/m. This indicator is calculated by the National Association of Realtors and shows changes in the number of contracts, signed but not paid for the month. The indicator is a harbinger of the (New Home Sales) and has a multiplicative impact on the financial sector (mortgage), secondary consumer goods (industry and trade) and high-tech goods (IT). In case the indicator exceeds the predicted level at 1.1%, we can expect the U.S. currency to strengthen.


Here we consider the EUR/USD on the H4 chart. The D1 and the H4 trends are under bearish control. Investor’s behavior synchronization within different time frames allows reducing the forecast risks. The price crossed the PivotPoints signal line from above along with the Shooting Star candlestick pattern formation (marked in yellow on the chart). The ParabolicSAR and the RSI-Bars confirmed the trend. Nevertheless, the oscillator is still in the local oversold area, so we should wait for the resistance breakthrough located around 25.39672. It can be considered as trend confirmation signal.

The pending sell order is most optimally to be open below the first PivotPoints support level, which coincides with the H4 trend channel support line. We expect that this level violation coincides with the oscillator support breaking point. The position is recommended to be open, if fundamental indicator exceeds the predicted level of 1.1%. Conservative traders are suggested to partially close a position when channel resistance line is reached the weekly trend and more aggressive ones can move the SL along with the market trend. The SL is recommended to be set at the PivotPoints signal line located at 1,36099. We will move the SL after the Parabolic SAR every 4 hours , following the trend. Thus, we optimize the return/risk ratio in our favor down the process of changing market conditions. The trailing stop is recommended to be set at 300 points away from the price, if the position is left overnight. This distance corresponds to the distance between the last two fractal peaks. As usual , we recommend to cancel the pending sell order in case the price crosses the stop loss level before it reaches the pending order level.

Position openingbelow 1,35730
Preliminary target above 1,35012
Preliminary stopabove 1,36099


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