Forex Strategy: EUR/USD Shooting Star Prefers Shorts
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- EUR/USD Technical Strategy: Awaiting follow-through to confirm technical bias
- Doji suggests some indecision, but more meaningful reversal signal remains absent
- Clearance of 1.3700 needs additional confirmation to support continued advance
The Euro has extended its recent gains and is wavering around the critical 1.3700 level. While there appears to be some indecision amongst traders as signified by the Doji candle formation on the daily, it may be too soon to suggest a reversal. Indeed caution is suggested here when looking at selling EUR/USD, based on a false reversal signal provided by a Shooting Star formation last week.
Similarly, caution should be exercised when looking at trading an upside break, given that volumes are relatively light in Asian trading and fundamental catalysts have so far been lacking during the session. Thus price action during the European and US sessions ahead are likely to provide stronger signals which may confirm a directional bias.
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Daily Chart - Created Using FXCM Marketscope 2.0
--- Written by David de Ferranti, Market Analyst, FXCM
Contact and follow David on Twitter: @Davidde
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