Technical Analysis EURUSD : 2018-04-06

IFCMarkets Technical Analysis
IFCMarkets Technical Analysis

Euro-zone’s composite PMI and German factory orders were lower than expected. Will the EURUSD continue declining?

Euro-zone’s composite Purchasing Managers’ Index slipped from 55.3 to 55.2 in March. Separately retail sales in the region and German factory orders rose less than expected in February. Slowing of expansion in euro-zone services activities and in manufacturing sector of euro-zone’s biggest economy are bearish for euro.

On the daily timeframe EURUSD is retracing after it hit 4-year high in February. It has fallen below 50-day moving average MA(50).

  • The Donchian channel indicates downtrend: it is tilted down.
  • The MACD indicator is below the signal line and the gap is widening, which is a bearish signal.
  • The Parabolic indicator gives a sell signal.
  • The stochastic oscillator is in the oversold zone, this is a bullish signal.

We believe the bearish momentum will continue after the price breaches below the lower Donchian boundary at 1.2217. A price point below that level can be used as an entry point for a pending order to sell. The stop loss can be placed above the upper Donchian bound at 1.2476. After placing the pending order the stop loss is to be moved every day to the next fractal high, following Parabolic signals. Thus, we are changing the probable profit/loss ratio to the breakeven point. If the price meets the stop-loss level (1.2476) without reaching the order we recommend cancelling the order: the market sustains internal changes which were not taken into account.

Technical Analysis Summary

Position Sell
Sell stop Below 1.2217
Stop loss Above 1.2476
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