Forex Technical Analysis: Euro Confirms Bull Run by Breaking ?0.89400 Resistance
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Euro FX Spread Betting Analysis
During the past month, the Euro has continued with its bull run against Sterling which started when it first broke out of the Ichimoku cloud on the 3rd of March this year.
We have seen two relatively large price corrections during this period, but neither were large enough to break the overall momentum of the bull run.
Looking at the chart below, it would seem the bull market is still intact for the FX spread betting pair.
The price of the Euro is far above the Ichimoku cloud and it is also well above both the short term (red) Tenkan-Sen line and the longer term (blue) Kijun-Sen.
Furthermore, the green Chinkou Span is also well above the price 26 periods ago, strengthening the view of an intact bull market.
Considering the longer term forex technical analysis, on the 12th of April the price made a failed attempt to break through the previous high it reached on the 25th of October last year near £0.89400. It subsequently retracted, but on the 3rd of May it finally broke through this psychological barrier to form a new medium term high.
The fact that the price managed to break through this resistance level means we can now look forward to new highs in the near future.
Despite this a cautious trader would wait for a price correction before entering into a long position, making use of the red Tenkan-Sen line as a stop loss or, if you have a bigger loss appetite, the blue Kijun-Sen.
Going short on the Euro - Sterling spread betting market is currently only feasible for day traders who can earn money through short term price fluctuations. Longer term traders should wait for the price to drop below the Ichimoku cloud before taking a short position.
Good luck and happy trading
Shai Heffetz, InterTrader
(Original article written 3 May 2011).
Spread betting carries a high level of risk and you can lose more than your initial deposit, so you should ensure spread betting meets your investment objectives.
The contents of this report are for information purposes only. It is not intended as a recommendation to trade. Neither InterTrader nor CleanFinancial.com accept any responsibility for any use that may be made of the above or for the correctness or accuracy of the information provided.
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'Forex Technical Analysis: Euro Confirms Bull Run by Breaking ?0.89400 Resistance' edited by DB, updated 03-Apr-11
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