EUR/USD: euro strenthening
Tatiana Norkina, FBS analyst
As noted earlier, the currency pair has consolidated above the four-hour Ichimoku cloud and reached a very important transitional mark of 1.2560 two days ago. Here goes the resistance level formed both on the timeframe under consideration and on the daily chart - the lower cloud border. The cloud itself is bullish now, but the level testing was followed by a corrective rate decline to the support of the Tenkan-sen line at 1.2490. This forced the inidicator lines to turn sideways, which shows a short-term flat market condition. Testing of the Kijun-sen line level is also possible in the near future.
Oscillators are quite optimistic. The MACD histogram is forming new highs, which corresponds to the local price peaks. A slight decrease of the RSI line is associated with the correction of the pair.
Despite the generally bullish character of the indicators, buyings might be risky today, as on the daily timeframes, trades are performed in conditions of a downward cloud and an active dead cross. Therefore, let us not rule out a possibility of the currency pair rate depreciation into the 1.2420 area.
Technical levels: support – 1.2420, 1.2470; resistance – 1.2560.
1. Buy — 1.2470; SL — 1.2450; TP1 — 1.2560; TP2 — 1.2590.
2. Buy — 1.2420; SL — 1.2400; TP1 — 1.2560; TP2 — 1.2590.