Forex Weekly Review - 13.01.2012

[RLFX]

EUR-USD

Weekly chart

Last week review

The last trading week signed the stoppage of the sharp ascending move, the price has corrected some of the mentioned trend, and the interesting part is on the last candle created which called “the hanging man”. By the Japanese candle theory this candle shows the stoppage of a trend upwards and the possibility for a reversal of the trend when it comes at the end of an uptrend and under a resistance level. At the current situation we cannot call the previous two green candles a classic uptrend but the appearance of “the hanging man” candle after them and under the 1.3240 resistance level shows a possibility for a change of the trend, another thing that strengthens this assumption is the fact that this level is a 38.2% correction of the last descending move (red broken line). In case this scenario will be realized, it is possible that the 1.2910 will be the first target of the price, by being a support level. The second option is breaching the price at the 1.3240 price level with the target at the 1.3433 price level, which is a 50% correction of the mentioned downtrend.

Current review for today

The price has breached the 1.3241 price level but was thrown back after touching the Bollinger’s moving average that is heading sharply downwards and does not let the price to continue the uptrend. The price is located at the moment under the 1.3241 Fibonacci correction level and from this point we have the following options: breaking the peak of the last candle will indicate the possibility to check the 1.3433 price level which is a 50% Fibonacci correction level of the downtrend shown by red broken line. On the other hand, a brake in the current area and another check of the low of the last candle, breaking that will probably lead the price towards the closest support level at the 1.2910.

Daily chart

Last week review

During the last trading week the price has stayed between the limits of the 1.3077 support level and the 1.3210 resistance, while almost every day the price has reached to both of those levels but could not close the candle above or under them. It is possible to assume that a closure of a candle with most of its body is under the 1.3077 price level will send the price to a correction in size of between a third (38.2%) and two thirds (61.8%) of the uptrend began from the 1.2625 price level. On the other hand, breaching the 1.3210 price level in a proven way will sign that the price will make it way towards the 1.3440 which is the 50% correction level.

Current review for today

The price did breached the 1.3210 price level but it is possible to see that most of the breaching candle (forth candle from the left) was under the breaching level and the following two candles were with small bodies, that shows the missing of power on the buyers. The last candle shows the attempts from the sellers to turn the trend around and after the obvious correction was made to the 1.3245 price level (a correction in size of a third of the downtrend described in red broken line), they will try to bring the price back to the last low at the 1.2645 price level, this is not an easy task and only a proven break of the 1.3077 price level and a descend of the price under the Bollinger’s moving average will give the sign of this move. On the other hand, entrance of buying powers and breaching the 1.3321 price level by that will sign the continuation of the uptrend with a target of the price at the 1.3436 price level, which is a 50% correction of the downtrend (red broken line).

By: Real-Forex a true ECN broker
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