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EUR/USD: Ichimoku analysis (Dec. 13)

Daily. Last week the currency pair was able to overcome resistance of the upper border and entered the positive region. During the week the pair rebounded to October highs, and Ichimoku Cloud switched to the bullish state: Senkou Span A and Senkou Span B crossed in the opposite direction; Senkou Span A is growing. However, in the $1.3800 area the buyers met with strong resistance, which can make the pair reverse down. The overbought state of the market indicated by Chinkou Span can also act against the bulls. Tenkan and Kijun went sideways, which also confirms the high probability of a correctional phase.

Chart. Daily EUR/USD

H4. At H4 the Ichimoku indicator looks quite optimistic: the Cloud continues to grow up, the gold cross (C) is still in place. However, in the last trading day EUR/USD went below Kijun-sen and headed to the upper boundary of the Cloud. A fix below Kijun-sen (KS) will mark the beginning of a correction. In this case, the lines will form a dead cross – a signal to  go short in the near future.

Chart. H4 EUR/USD

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