Talking Points
- EUR/USD Technical Strategy: Flat
- Dojis on four hour timeframe highlight indecision amongst traders
- Evening Starformation on the weekly offers ominous warning
EUR/USD has powered through several key resistance levels in recent trading, which has likely caught the bears off-guard. With a reversal signal still missing on the daily, further gains may be possible with sellers offering some intraday resistance at psychological level of 1.3900.
EUR/USD: Break above 1.3800 Opens Further Gains
Daily Chart – Created Using FXCM Marketscope 2.0
Drilling down to examine intraday price action, the Bearish Engulfing pattern noted yesterday failed to receive confirmation from a successive down-period which precluded a bearish technical bias. Several Doji candlesticks near 1.3900 are on the radar for the session ahead, as they indicate some indecision amongst the bulls. While they suggest that the rally may stall, they are not enough to indicate a potential correction at this stage.
EUR/USD: Bearish Engulfing Pattern Fails To Receive Confirmation
4 Hour Chart – Created Using FXCM Marketscope 2.0
Finally, taking a look at some broader context provided the weekly chart; the Evening Star formation that has emerged shy of the key 1.4000 is a notable warning signal of further declines ahead. The pattern has received confirmation from a successive down week which raises the likelihood of an eventual correction towards the 1.3480 support level.
EUR/USD: Evening Star Remains On The Radar
Weekly Chart – Created Using FXCM Marketscope 2.0
By David de Ferranti, Market Analyst, FXCM
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