|EUR/USD Candlesticks and Ichimoku Analysis|
|Trade Idea Archives | Written by ActionForex.com | Feb 23 09 05:00 GMT|
EUR/USD Candlesticks and Ichimoku Analysis
The 'evening star' pattern formed at 1.4720 in Dec 2008 is still pressuring euro and although recent decline from there resumed last week and euro dropped to 1.2513, the single currency needs to break 1.2329 support to confirm the major reversal from 1.6040 record high (made at July 2008) is still in progress and extend further weakness to 1.2100. On the upside, recovery should be limited to 1.2750/60 and renewed selling should emerge well below 1.2920/30. As Tenkan-Sen crossed below Kijun-Sen last week, providing a sell signal, one should treat these level as selling opportunity. Only above resistance at 1.3095 would indicate the move from 1.4720 has formed a temporary low and correction to 1.3335 is possible but selling pressure should increase around 1.3435/40, 50% retracement of 1.4363 to 1.2513 and 1.3800/30 resistance area should remain intact.
On the daily chart, the picture is not as bearish as the weekly chart (at least not at the near term), a possible reversal pattern 'morning star' is forming at Thursday's low (19 Feb) at 1.2513, however, we need to see the price action in the coming 2 days in order to confirm this formation (one should take reference of another similar pattern at previous low at 1.2706, which also looked like a morning star, however, the subsequent 2 days failed to provide white candle and price then fell again last week). So a white candle is needed on Monday (better to be a long one) to add credence to this view and a daily close above 1.2995/00 would provide final confirmation, bring further gain to 1.3070/75 (around current level of Kijun-Sen), otherwise, another decline to 1.2513 cannot be ruled out. Break of 1.2513 would extend weakness to 1.2423 but downside would be limited to 1.2388 and last year's low of 1.2329 should hold from here.