EUR / USD: "Thorn" brings to market correction

Price was faced with a 1.1130 resistance, leading to a decline locally. So, the market is likely to get a short-term support in the 1.1045 to 1.1032. If a pullback from this area happens, speculators can increase the price will try to reach a resistance at 1.1145 to 1.1188.

There is a local sideways between resistance at 1.1130 and MA nearest 34. Therefore, the pair is likely to reach the bottom of the current resistance at 1.1045 to 1.1032. If we see the pullback from here, a trend becomes possible, so we should keep track next resistance at 1.1179 to 1.1188 as a possible target increase.

GBP / USD: "V-Top" investors stop prices rising for some time

We had a pattern "V-Top" reduce, has established the local downward movement. Therefore, the currency pair is likely to gain support at 1.3226 to 1.3116 a, near the bottom of the downtrend. If speculators reduced prices stop here, will have a chance to see an increase in the area between the upper resistance at 1.3614 and 1.3681 levels.

There is an ongoing sideways below the MA 34. Therefore, the market is likely to get support at 1.3273 to 1.3226 in a day. Considering a possible pullback from the region, speculators increased rates may be trying to reach resistance at 1.3614 to 1.3681 later.

Technical analysis ALLIGATOR

The Alligator helps to identify a real trend. Its creator Bill Williams recommends following trends and staying out of trading when the price is range-bound.

Alligator Technical Indicator consists of 3 balance lines (Moving Averages, MAs):

• Blue line (Alligator’s Jaw) – 13-period smoothed MA, moved into the future by 8 bars;
• Red line (Alligator’s Teeth) – 8-period smoothed MA, moved into the future by 5 bars;
• Green line (Alligator’s Lips) – 5-period smoothed MA, moved into the future by 3 bars.

When all 3 lines are intertwined, the Alligator is asleep and the market is range-bound. Traders should follow the example of the Alligator and stay out of the market. As the Alligator sleeps, it gets hungrier and hungrier – the longer it will sleep, the hungrier it will wake up.

After waking up hungry Alligator starts to hunt the price until it has enough pray. Uptrend starts when all 3 lines, one after the other, start rising (the green line is above the red one and the red is above the blue one) – one may open a long position. The Alligator will be chasing the price, which has to be above the Alligator’s Jaw.

Downtrend starts when 3 lines, one after the other, start declining (the green line is below the red one and the red is below the blue one) – one may open a short position. The Alligator will be chasing the price, which has to be below the Alligator’s Jaw.

Having eaten enough, the Alligator starts to lose the interest to the food/price. The lines join back together and it’s the time to fix the profit.

According to the Dow theory, one may use the following strategy:

• If the Alligator shows uptrend on D1, await decline on H4 and buy on M30.
• If the Alligator shows downtrend on D1, await advance on H4 and sell on M30.

You must watch the close price of the candle. If the Alligator lines intertwined at the time of the close, this is a trading signal. If not, one better wait.

How to interpret MOMENTUM

The Momentum technical indicator measures the amount that a security’s price has changed over a given time span. It attempts to measure the momentum behind price movements for the underlying currency pair over a period of time.

How to interpret:

There are basically 2 ways to use the Momentum indicator:

• As trend-following oscillator (see the left part of the chart)
• Buy when Momentum bottoms and turns up. Sell when Momentum peaks and turns down. A short-term moving average applied to the indicator will help to determine the indicator’s turning points (violet line on the chart). If Momentum reaches extremely high or low values (relative to its historical values), the odds are that the current trend will continue. If Momentum reaches extremely high values and then turns down, assume that prices will probably keep going higher. Enter the market only after prices confirm the signal generated by the indicator – in this case wait for the prices to start falling and then sell.
• As a leading indicator (see the right part of the chart)
• Often Momentum begins to turn before price. When Momentum is diverging from the price, it may be regarded as a leading indicator pointing at potential top (when Momentum is falling while the prices are going up) or bottom (when Momentum is increasing while the prices are going down).

How to interpret MACD

MACD indicator (Moving Average Convergence/Divergence) is used to spot changes in the strength, direction and duration of a trend. MACD histogram is the difference between a 26-period and 12-period exponential moving averages (EMA). In order to show buy/sell opportunities, a so-called signal line (9-period moving average) is plotted on the MACD histogram.

How to interpret:

1. Crossovers.
   • Buy when the MACD-histogram rises above the signal line. Sell when the MACD-histogram falls below the signal line.
   • Buy when the MACD-histogram rises above 0. Sell ​​when the MACD-histogram falls below 0.
2. Convergence/divergence. Bearish convergence occurs when the price is printing lower lows, but the histogram – higher lows (buy signal). Bullish divergence occurs when the price is printing higher highs, but the histogram – lower highs (sell signal).
3. Histogram bars. Buy when histogram bars start growing after a decline. Sell when histogram bars start declining after growth.