EURUSD Forex Technical Analysis June 16, 2014

By IFCMarkets

Good afternoon, dear traders. Today in the afternoon we expect the publication of the U.S. several macroeconomic indicators, none of which will have a long-term impact on Forex market: 14:30 CET, Empire State Manufacturing Index; 15:00 CET, TIC Long-Term Purchases by the U.S. Department of the Treasury and at 15:15 CET, Industrial Production m/m. The news is delayed for 15-30 minutes. The indicators are equally important in the U.S. macroeconomics description. For this reason, today we are going to rely more on the technical analysis signals.

Here we consider the EUR/USD currency pair on the H4 chart. The price moves within a day downward trend, but temporarily it has been consolidated in a flat corridor. One should not be confused by this fact for a few reasons. First of all, we did not observe correction – the bulls could not turn the tide in their favor, even temporarily. Secondly, a bearish corridor H4 has been formed, on the right border of which we see the “absorption” candlestick pattern (marked in yellow on the chart). Finally, the price crossed the signal line PivotPoints downwards, then a new bearish value of the ParabolicSAR trend indicator was received. There is no contradiction on the part of RSI-Bars: the last bar approached the downward trendline, and that indicates a probable correction completion.

Pending sell order is preliminary placed below the key fractal minimum at 101.957. This mark is confirmed by the ParabolicSAR and the PivotPoints support. The first profit target is marked at 1.34610. The position can be partially closed, when achieving the target e.g., half of the volume can be left. Stop Loss can be chosen at the last fractal high at 1.35793, which coincides with the historic value of the ParabolicSAR indicator and the first PivotPoints support. Opening a position, it is recommended to move the Stop loss after the parabolic values every 4 hours after the order execution. Thus, we can optimize the return/risk ratio in our favor in the process of changing market conditions. If you decide to take a break from the market, the automatic Trailing Stop can be placed, taking the distance between the two previous fractal peaks into account. This distance is indicated by the double arrow on the chart above.

Market Analysis provided by IFCMarkets