Let us consider the EUR/USD currency pair on the H4 time frame. The price has crossed the trend line downwards, shaping the first bearish signal. At the moment we observe consolidation, but there is every reason to believe that a new trend will emerge today after the final Eurogroup meeting, devoted to the Greek debt crisis. The ParabolicSAR indicator has turned towards the red zone. Donchian Channel has been demonstrating a negative slope as well. The RSI-Bars oscillator does not contradict our assumptions: its signal has shaped a bearish divergence, crossing the substantial support line at 38%.
We suppose that all the represented analysis tools have been giving bearish signals. The terminal impulse is expected after breaching the 38% support level, which corresponds to the Donchian Channel lower boundary and he fractal at 1.11283. A sell pending order may be placed here. A stop loss may be placed at the channel opposite boundary – the 1.12706 mark. It is confirmed by Parabolic historical values and the trend line. The further bearish momentum is supposed to be assured be breaking out the oscillator support at 26%. Conservative traders are recommended to monitor this signal. The stop loss should be moved every four hours near the next fractal high, following Parabolic signals. Thus, we are changing the probable profit/loss ratio to the breakeven point.
|Sell stop||below 1.11283|
|Stop loss||above 1.12706|