EUR/USD To Extend Declines On Daily Close Below 1.3500
EUR/USD Technical Strategy: Pending Short
Dojis signaled hesitation by the bulls near critical support
Awaiting close of the daily candle to look at new shorts
EUR/USD has finally cracked the critical 1.3500 handle after traders exhibited notable signs of indecision in the form of several Doji candlesticks. A daily close below the support level would suggest enough conviction amongst the bears to lead a charge on the next psychologically-significant level at 1.3400.
EUR/USD: Downside Break To Open 1.3400 Handle
Daily Chart - Created Using FXCM Marketscope 2.0, Volume Indicator Available Here
Drilling down to the four hour chart; a Bearish Engulfing formation offered an early warning that the bulls had lost their grip on prices. Traders should note however that the most recent intraday break of 1.3500 was quickly retraced yielding a Dragonfly Doji formation. This further suggests that waiting for the close of the daily candle would afford a less risky approach to trading the downside break.
EUR/USD: Absence of Key Reversal Patterns Casts Doubt On A Recovery
4 Hour Chart - Created Using FXCM Marketscope 2.0, Volume Indicator Available Here
By David de Ferranti, Market Analyst, DailyFX
Follow David on Twitter: @Davidde
To receive David’s analysis directly via email, please sign up here.
Learn how to read candlesticks to help identify trading opportunities with the DailyFX Candlesticks Video Course.