Our predictions regarding the direction of the currency pair EUR /USD, presented in the previous analysis of true and quotes after the March minima was replaced mid-term descending trend in the opposite.

Over the last few days of trading in the pair are close to psychologically important mark of 1.40 and has not yet been defined with a clear direction of movement up or down. However, we believe that the upward trend of the pair in the next few months will continue and we can not exclude the likelihood of achieving the quotations earlier highs.

This says first of all, the intersection of exponential moving averages with a sufficiently large time intervals of 50 and 200. Thus, fast moving slowly upward, crossed with the first 2 quarters of 2006, thereby giving a signal to the formation of at least medium-term upward movement of quotations (Fig. 1)

Fig. 1 - Full-time dynamics of pair EUR /USD since 2006, and simple moving averages

 

 

Source: Reuters

The graph also shows the formation of figures continue the trend triangle, which, however, has not yet been completed.

considering other technical indicators for the pair EUR /USD we can say that they, in general, not inconsistent with the development of medium-term upward trend. Indicator ADX, submitted under the daily schedule in Fig. 2 shows the intersection of the line DX DX-line upwards, which confirms the upward trend, which is the trend line at the moment, no signals of its extinction.

indicator of slope of linear regression, which is located just below the nearly crossed zero from bottom to top, indicating the beginning of a rising trend.

Relative Strength Index RSI is outside the zone perekuplennosti and pereprodannosti that also does not preclude the continued upward movement.

Fig. 2 - Technical indicators for the pair EUR /USD

 

Source: Reuters

Recommendations

Thus, in the perspective of the coming months we expect to increase the pair EUR /USD, as at this point we have studied the technical analysis indicators that show the relevance of re-entry into the market right now.

On the other hand, the completion of the figure triangle may indicate some uncertainty and the most conservative investors should wait for a breakthrough quotations upper resistance line, however, may be a lost opportunity to enter the market at current minimum prices.

Target motion pair, based on the difference between the top and the base triangle will be a maximum of last year at 1.60, while in the case of a false alarm and the closure of a number of trading sessions running less than a slow moving average, provided change of signals from other indicators on the opposite, as well as the foundation of Perforation triangle down, we recommend to set stop-loss at 1.35.

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