Technical Analysis EURUSD : 2014-07-14


Good afternoon, dear traders. Today at 19:00 (CET, server time) Mario Draghi, the ECB President, delivers his speech in the Committee on Economic and Monetary Affairs of the European Parliament. Traditionally his speech in Strasbourg will be devoted to the controller’s monetary policy outlook for the next few months. Draghi’s speech is the key event of the currency market today, given the European economy continuing stagnation. New measures that encourage investment should not be excluded. We assume that Draghi’s speech can lead to the European currency increased volatility.

валютная пара EUR/USD

Here we consider the EUR/USD currency pair on the D1 chart. The price entered the consolidation triangle directed along the daily bearish trend line. Under classic scenario the downtrend area is limited by the weekly support line. We can see that at the moment the RSI-Bars bullish divergence has already been formed, which is testimonial in terms of the sideways range. Donchian Channel, directed into the green zone, confirms the divergence. However, the price is still showing the balance that is confirmed by the “balance” candlestick pattern and the price approach to the Parabolic SAR trend indicator signal.

A definite conclusion on the daily trend completion can be made after the fractal resistance breach at 1.36971, which coincides with the Donchian Channel current peak. This level is crucial for placing a pending buy order. Risk limitation is placed at the last support 1.35096 near the weekly trend line. Do not forget that even a stable trend can be destroyed. Given the current situation, it may occur in case the price breaks the W1 trend line downwards near the level of 1.35096. When crossing a key level, the Parabolic reversal is expected, as well as the Donchian Channel support downward intersection. In this case, the RSI-Bars preliminary signal would be the first sign of the bearish sentiment strengthening: we expect the support downward intersection of the oscillator at 40.8602. It would be reasonable to place pending sell order below 1.35096 with the preliminary risk fixation at 1.36971. Accordingly, the pending sell order is determined in a symmetric manner.

Directionup
Buy stopabove 1.36971
Stop lossbelow 1.35096

Directiondown
Sell stopbelow 1.35096
Stop lossabove 1.36971

Note

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