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Forex Spread Betting Analysis: Euro Maintains Bull Run Despite Losing Momentum |
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The bull run we have seen in the Euro since the middle of February seems to have lost most of its steam since the beginning of May.
On the 5th and the 6th of May we saw two rather sharp declines in the price, which brought it below the blue Kijun Sen line of the Ichimoku Kinko Hyo in the chart below.
It subsequently broke out again on the 2nd of June, but soon dipped back into the Ichimoku cloud again.
Now it is marginally above the cloud, indicating that the spread betting market still has some of its original bullish sentiment left.
Looking at the chart below we see that on the 5th of July the market experienced another down day.
Going strictly according to the forex analysis provided by the Ichimoku Kinko Hyo, the market is still technically in a bull phase.
The green Chinkou Span line is still marginally above the price 26 periods ago, the price is still above the cloud and it is also above the blue Kijun-Sen and red Tenkan-Sen lines.
These lines are currently, however, in the cloud. The Kijun-Sen has also turned flat, which indicates the market does not have a lot of momentum at present.
A cautious forex spread betting trader would wait for a stronger signal before entering into a long trade. If the price moves above the recent high of $1.46956 it reached on the 7th of June, it might be a good time to go long again.
Right now is way too early for short trades. A cautious trader would wait for the market to drop back into the cloud and emerge downwards.
It would be advisable to wait for a second indicator, such as the blue Kijun-Sen line also breaking out of the cloud in a downward direction before going short.
Article by InterTrader, originally written on 5 July.
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Forex Spread Betting Analysis: Euro Maintains Bull Run Despite Losing Momentum - edited by MJ, 22 July 2011.
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