Forex Weekly Review - 05.03.2012

[RLFX]

EUR-USD

Monthly chart

Last Month review

In the big picture it is possible to say that since the end of year 2009 and until today the pair is limited between the 1.2000 and the 1.5000 price levels, while during this period it is moving from side to side, now it is on the lower lip of the range and it is possible to see how the Bollinger bands are closing the price from both sides and the meaning of it is that the price will not have a practical possibility to move beyond the limits of the bands unless something radical will occur. In the near future it looks like the 1.2530 price level is a Maximum target in case the price will push it down since this is a support level which is close to the lower Bollinger band that turns upwards sharply. On the other hand, an ascending move is possible as well with the breaking of the 1.3200 resistance level with a first target of the price at the 1.3500 price level, which is a correction in size of a third (38.2%) of the last descending move (red broken line).

Current review for today

First of all there is a need to mention that the current candle shows the current month.

The price corrected exactly a third (38.2%) of the last downtrend (red broken line) towards the 1.3500 price level, actually it got 15 pips short from this level. It looks like the price has stopped at this level and went back a little. It is possible to see that the price has opened this month by going downwards and still located under the Bollinger’s moving average (Bearish Market). A breaking of the 1.3500 price level will indicate that the price will climb in order to check the next Fibonacci level on the 1.3783. on the other hand, if the descending move will continue, we are expecting t see the 1.2600 price level checked again.

You can see the chart below:



Weekly chart

Last week review

Indeed breaking of the 1.3241 price level reached the next target on the 1.3433 price level, which is a 50% correction by Fibonacci of the previous downtrend (red broken line). It is important to mention that the current uptrend which began around the 1.2680 price level is still only a correction until it will break the 1.3625 price level which is a 61.8% correction of the downtrend. Now the price is located above Bollinger’s moving average, this is a bullish area and it is possible that it is on its way to the 1.3625 price level.

Current review for today

The last trading week showed a stoppage to the sharp uptrend, in which the price has stopped on the 1.3433 price level, a 50% Fibonacci correction level of the last downtrend (red broken line) and went back under the Bollinger’s moving average (bearish market). It is possible to assume that the price will go back to the 1.2580 last low level, in case the price will create a red candle which will confirm that the correction is over (last uptrend). On its way to the last low, the price might stumble on another obstacle which is the 1.2900 area , a significant support level that changed its role several times already, so it is possible to see it influence the price another time.

You can see the chart below:



Daily chart

Last week review

On the last two trading days, the buyers pushed it stronger and managed to breach the last peak on the 1.3321 price level and reached the weekly chart target of the 1.3436 price level, which is a 50% Fibonacci correction of the last downtrend (red broken line). It is possible to assume that if the price will establish itself above this level, it will reach the next Fibonacci correction level, the 1.3627. The meaning of establishing is breaching the current peak at the 1.3436 price level, which is a resistance level as it is shown on the chart.

Current review for today

It is possible to see that the 1.3484 price level served so far as a strong resistance level while none of the four candles which were close to it could close above. The last candle among those four is actually showing the decision of the sellers to invert the trend and after they have stopped the buyers they signed each other to push the price back to the next support on the 1.3077 price level. Another thing we can see is that the price has stopped on the 50% Fibonacci correction area of the last downtrend (red broken line). During the last uptrend a harmonic pattern named “Wolfe Waves” was created and described by points 1-5. This pattern supports a change in direction and the target of the price is the broken line connects points 1 and 4, meaning the 1.2900 price level approximately. This level is a strong support as it was written in the weekly chart review and it is possible that the price will stop there when it will reach it.

You can see the chart below:



By: Real Forex – Exclusive Trading
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