Technical Analysis EURUSD : 2018-05-03

IFCMarkets Technical Analysis
IFCMarkets Technical Analysis

Euro-zone’s Q1 GDP growth was lower than the GDP increase in the last three months of 2017. Will the EURUSD continue declining?

Euro-zone’s economy slowed in the first three months of 2018: Q1 GDP increased at an annualized rate of 2.5%, down from 2.8% in the fourth quarter of 2017. Economic data released in the previous day were not positive for euro-zone’s largest economy either: The decline in German retail sales accelerated in March, to 0.6% month-on-month after 0.2% contraction in previous month. Slowing of expansion in euro-zone economy is bearish for euro.


On the daily timeframe EURUSD is retracing after it hit 4-year high in February. It is testing the 200-day moving average MA(200).

  • 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 has breached into 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 1.1937. 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 1.2352. 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 (1.2352) 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 1.1937
Stop loss Above 1.2352

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