Forex Monthly review- 03.09.2012

The price has descended during the last month towards the 1.2230 support level but closed the candle above this level. Breaking of this level and closure of the price under this level will probably lead the price towards its last low on the 1.1877 price level. On the other hand, stoppage of the price at the current area and it is possible to see a technical correction of the downtrend which started at the 1.3500 price level.

 

The candle of the current month strengthens the assumption that the 1.2230 support level still holds in this stage, while it is possible to see (in the weekly chart review) that the price has corrected 38.2% of the downtrend which started on the 1.3500 price level. The mentioned Fibonacci level is the 1.2625 price level and used also as a resistance level. Breaking of this level will indicate that the price will continue towards the next resistance around the 1.2890 area. On the other hand, stoppage of the price at the current area will probably lead the price at first stage back to check the 1.2230 area again.

 

 

Eventually the 1.2290 price level was used as a strong support and we can see that the price has continued towards its closest target on the 1.2580 resistance level which is also used as a 38.2% Fibonacci correction level of the last downtrend (blue broken line) and as a dynamic resistance area (the lower lip of the descending price channel which is marked in red broken lines). Breaching of the mentioned followed by the 1.2680 price level (located in the same area) will indicate that the price will continue towards the next resistance on the 1.2910 price level. On the other hand, stoppage of the price at the current area and its descending under the 1.2290 price level will probably lead the price towards the last low on the 1.2042 price level.

 

 

It is possible to see that the price has corrected the whole last downtrend (blue broken line) by 38.2% by Fibonacci retracement towards the 1.2594 price level, while the red broken line is the upper lip of the descending tunnel from the weekly review and used as a dynamic resistance area. In addition it is possible to see that the current uptrend which started on the 1.2067 price level is going into a shrinking ascending price channel that its target is breaking of the lower lip while correcting the ascending move which happened inside. All those are showing the possibility of a stoppage of the current uptrend in case of a change in the direction of the price towards the last low on the 1.2067 price level. On the other hand, we can see that currently the price is climbing with an ascending price structure and while it stays this way, the targets of the price will be the 1.2692, 1.2750, 1.2824 price levels in this order.

 

The price is located under the Bollinger’s moving average (Bearish market) but still in the center of the triangle and continues to converge within. Breaking of the lowed rib and the 1.5200 price level will probably lead the price towards the next support at the 1.4200 price level. On the other hand, in case we will see a closure of a candle above the Bollinger’s moving average, is it possible that the price will check the upper rib of the triangle again.

 

It is possible to see that during the passing month the price has checked the 1.5500 support level (the low of the last candle) and went back up while closing in green. The price is located at the middle of the range while the Bollinger bands are closing on it. The convergence of the price into a symmetric triangle (black broken lines) shows its movement to the side as well. Breaking of the lower rib of the triangle and the 1.52 price level will probably indicate that the price will move towards the closest support on the 1.4200 price level. On the other hand, in case the price will go up and close above the Bollinger’s moving average, it is possible that it will check again the upper rib of the triangle.

 

The price has breached the 1.5778 upper ranging level and we can see that on the last candle the price has checked if this level can switch roles and function as a support (it can be better seen on the daily chart), followed an ascending move once the check was done. Breaching of the 1.5778 price level is breaching the neckline of the “One in, one out” pattern (blue broken lines), while its target is the next resistance on the 1.6170 price level. Only breaking of the 1.5778 price level will stall the current uptrend while it is possible to see a technical correction of the uptrend which started around the 1.5400 area.

 

 

The price has breached the 1.5737 resistance level and reached the 1.5906 by doing a sharp move upwards. At this stage the price has stopped and went down to check the 1.5784 support level (from the weekly chart review) while on the last day of the week, the price has climbed and currently located on the 1.5906 last peak level. Breaching of this level will probably lead the price to complete the “One in, one out” pattern target (blue broken lines), on the 1.6015 price level. Only breaking of the price on the ascending trend line which is connecting the lows will change this assumption.