Forex Weekly Review - 02.04.2012

[RLFX]

EUR-USD

Monthly chart

Last Month review

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.

Current review for today

It is possible to see that the last candle presents the previous month, showing the uncertainty that exists in this pair. The price has closed near the opening price after creating a long shadow downwards. Breaching the 1.3500 price level, which is a correction in size of a third from the last downtrend (red broken line) and it is possible that the price will continue its way north towards the 1.3780 price level, two thirds correction f the mentioned downtrend. On the other hand, an opening of price under the closure of the current candle and a creation of a red candle with a significant body will indicate that it is possible that the price will test the last low on the 1.2600 price level.

You can see the chart below:



Weekly chart

Last week review

During the last eight trading weeks it is possible to see that the price moved in a narrow area while the struggle between the buyers and sellers is in its full power in order to determine the direction of the price in the future. The Bollinger bands continue their shrinking towards each other, which shows low volatility in the near future. Breaking the 1.3400 price level will indicate that the price will make its way towards the upper Bollinger band in first stage. On the other hand, a break of the 1.2900 price level will probably lead the price towards the lower Bollinger band.

Current review for today

Not much changed since the last weekly review, besides the fact that the price went back to the area above Bollinger’s moving average, but that thing by itself does not show any credibility in order to define the direction of the price, that is because the price is moving inside a very narrow pattern, the prove for that the Bollinger bands are keeping on closing towards each other. Breaking the price on the 1.3450 price level will indicate that the price can go up towards the upper Bollinger band, meaning the 1.3625 price level, this level is a two thirds correction level of the last downtrend. On the other hand, descend of the price under the 1.3240 price level and it is possible that the price will go down to check the 1.2900 support level.

You can see the chart below:



Daily chart

Last week review

It looks like the price is on its way to the 1.3300 price level, a resistance level which was already broken not too long ago so a second breaking will be easier. In this scenario, it is possible that the price will climb to the last peak on the 1.3484 price level. In case the price will stop at the current area, it is possible that a ranging move will take place since we can see that the Bollinger bands are starting to close towards the price and a stop at the 1.3300 price level will reduce the volatility.

Current review for today

The price did reach to the 1.3300 price level and at the moment this level is a balance point after the price has moved on its both sides during the last 4 days trying to define the direction. At this point we can see that the ascending trend line that connects the lows (blue broken line) is braking the continuation of the uptrend and we assume that only a clear establishment of the price above this line will let it continue on its way upwards. Breaking the 1.3484 price level will probably le3ad the price to the 1.3627 price level, which is a 61.8% Fibonacci correction level of the downtrend marked in red broken line. On the other hand, if the price will go under the Bollinger’s moving average it will probably test the 1.3000 low as a support level.

You can see the chart below:



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