Tracking the EUR/USD pair: 04.04.2012

[RLFX]

Date: 03.04.2012 Time: 22:56 Rate: 1.3235

Daily chart

Last Review

During the last 5 days the price is leaning on the 1.3321 price level and trying to check whether this level can change its role from resistance to support. It is possible to see that none of the candles could close under this level even though there were many attempts to do so with long shadows falling downwards. In addition we can see that the price is located above the Bollinger’s moving average which shows a Bullish market while the moving average is starting to circle upwards and used as a dynamic support to the price. On the other hand, the price still did not manage to establish itself above the ascending trend line (broken blue line) and will have to do so in case the buyers want to continue the uptrend, it is possible to assume that breaking the 1.3484 price level will lead the way towards the 1.3627 price level, two thirds correction of the last downtrend (red broken line).on the other hand, breaking the price and a closure of the candle under the Bollinger’s moving average, will probably lead to the price towards the last low on the 1.3000 price level.

Current review for today

The 1.3321 price level used as a resistance and in addition the could not breach the ascending trend line and stay above it, that sent the price towards the Bollinger’s moving average that is used as a dynamic support level at this point. As it was said in yesterday’s review, closure of a candle under the moving average will probably lead the price to check the last low on the 1.3000 price level. On the other hand, an establishment of the price on the moving average and coming back above the 1.3320 price level will sign that it is possible that the price will try to go create another move upwards in order to breach the ascending trend line.

You can see the chart below:



4 Hour chart

Date: 03.04.2012 Time: 23:15 Rate: 1.3235

Last Review

It is possible to see that the 1.3320 price level which was described in the daily chart as the support level and stopping all the attempts of the price to go down, is used in this chart in the same role, now it is possible to see the third candle from the left went down to the lower Bollinger band, stopped exactly on it and closed above the 1.3320 price level. Breaking this level and the ascending trend line between points 2 and 4 will probably lead the price following the “Wolfe waves” pattern to the area between the 1.3230 and the 1.3150 price levels which are Fibonacci correction levels of the uptrend locked in the shrinking ascending price channel (blue thick broken line), breaking of the last mentioned level will lead the price towards the “Wolfe waves” pattern target which is its crossing with the line connecting points 1 and 4. Only a proven breaking of the 1.3385 price level will cancel this assumption.

Current review for today

It is possible to see clearly how the third candle from the right is closing under the trend line connecting the lows (points 2 and 4) for the first time since the beginning of the uptrend, the next candle made a check to this trend line, if it can switch roles from a dynamic support to a dynamic resistance, and the next candle simply continues strongly downwards (it is true that there was an announcement of the FED in the USA, but it is interesting to see how the technical analysis works so nicely with the reality). The price has corrected the last uptrend (blue broken line) by a third to the 1.3239 price level and by that it completed its first target as it was written in yesterday’s review. Now it is possible to assume that after a technical correction of the last downtrend (if this kind of correction will occur), the price will continue to its second target on the 1.3186 price level and the 1.3150 after. Breaking the 1.3150 price level will lead the price towards the “Wolfe waves” pattern target which is the crossing between the price and the line connecting points 1 and 4.

You can see the chart below:



GBP-USD

Date: 03.04.2012 Time: 23:28 Rate: 1.5916

4 Hour chart

Last Review

Since the last review in which it was said that the price corrected 38.2% of the uptrend marked in black broken line, it is possible to see that the price is supported in this Fibonacci correction level and performed an impressive move upwards to the 1.6083 price level. The 1.6000 price level was breached but the price is still checking it and the breaking is not proven enough. The “Wolfe waves” Pattern is still working since the price is located in the “sweet area” (brown background) but it seem to be fading. Proven breaking of the 1.6100 price level will indicate that it is possible that the price will continue its way upwards. On the other hand, breaking the lower ascending trend line (connecting points 2 and 4), will probably lead the price to the “Wolfe waves” pattern target, meaning the cross of the price with the line connecting points 1 and 4.

Current review for today

It was mentioned on yesterday’s review that the “Wolfe waves” pattern is fading, but here in one day it came back to life and in its full power. By breaking the ascending trend line (points 2 and 4) the price filled the pattern and the probability that it is on its way towards the pattern target on its crossing with the line connecting points 1 and 4 grew significantly higher. it is very possible that on its way downwards the price will correct the last downtrend which started at the 1.6083 price level, but this correction is supposed to be only a secondary move on its way to the mentioned target.

You can see the chart below:



Important announcements for today:

08.30 (GMT+0) GBP – Services PMI
11.45 (GMT+0) EUR – Rate Decision
12.15 (GMT+0) USD – ADP Non-Farm Employment Change
12.30 (GMT+0) EUR – ECB Press Conference
14.00 (GMT+0) USD – ISM Non- Manufacturing

By: Real Forex – a True ECN Broker
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