EUR/USD: Ichimoku analysis
Daily. During the past week EUR/USD renewed local extremes formed in September: the pair traded above $1.3640 last Thursday almost reaching the target levels of short-term growth – $1.3650. However, by the end of the trading day on Friday, the bears appeared at the market and pulled the currency pair to Tenkan-sen. This line ($1.3550) keeps euro from serious corrective decline inside the Tenkan-Kijun channel. If this support is breached, EUR/USD will soon fall to $1.3470. The overall situation is still quite positive (Ichimoku cloud is in the bullish state), but very inconvenient for future purchases as Chinkou Span shows an overbought market.
Chart. Daily EUR/USD
H4. On H4 the pair is once again trading below the Tenkan and Kijun lines. Note that these lines formed the dead cross (C), which indicates a change in the short-term sentiment. Therefore, in the near future we can expect more bearish pressure on the upper limit of the Ichimoku cloud. This support will likely be breached as Chinkou Span is located under the price chart. All in all we observe a steady sideways move at this timeframe – all lines of the indicator are horizontal.
Chart. H4 EUR/USD
Tatyana Norkina for FX BAZOOKA