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Advantage belongs to bulls, but correctional signals are here

31 March 2016, EUR/USD

Daily chart: the pair has approached close enough to the resistance 1.1392 (Upper Bollinger Band). At the same time, we see enhanced activity from ADX, but it has not reached the trend area. We are based on the assumption that a downward rollback from 1.1392-1.1400 will take place.

Н4: the first" tails" of the bars from 1.1392 imply a local weakness of bulls and urge correction targeting the middle Bollinger band (1.1223). ADX is very active, a strong overboughtness is recorded. The situation is ambigious, bears should be extremely cautious and enter correction only after we get confirming signals.

Н1: signs of divergence of the oscillator. Local resistance is 1.1351 (Upper Bollinger Band). Support - 1.1315 and 1.1279 (middle and lower Bollinger bands, respectively).

Expectations: The main scenario - reach of 1.1392-1.1400 area, and then a downward correction to 1.1315

The alternative scenario - a downward correction from 1.1351 to 1.1315 and 1.1279

Trading solutions: advantage belongs to bulls, it is a little late to enter up. We should either wait to enter down (under the first scenario) or be patient to buy at the bottom of the main trend.

Aleksey Panasenko
Analyst of «FreshForex» company
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