Forex Strategy: EUR/USD Bearish Engulfing Pattern Warns Of Correction
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- EUR/USD Technical Strategy: Short pending
- Bearish Engulfing pattern hinting at a correction
- Buyers likely sitting at nearby 1.3750 mark
The bullish reversal signal offered by the Hammer formation on the hourly chart for EUR/USD noted in the last candlesticks report has played out for the pair. While an indication of an uptrend remains on longer timeframes there is a warning sign of a potential short-term correction on the hourly chart. This is in light of a Bearish Engulfing pattern that emerged as the bulls lost out just above the psychologically significant 1.3800 level.
Given buyers are likely sitting at nearby support at 1.3750 (also the 38.2% Fib Retracement level) a clearance below that mark is needed before offering a bearish technical bias for the pair.
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Hourly 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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