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Forex Strategy: EUR/USD Bearish Engulfing Pattern Warns Of Correction

Forex Strategy: EUR/USD Bearish Engulfing Pattern Warns Of Correction

2014-03-03 10:57:00
David de Ferranti, Currency Analyst

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Talking Points

  • 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.

Confirm your chart-based trade setups with the Technical Analyzer.

Forex_Strategy_EURUSD_Bearish_Engulfing_Pattern_Warns_Of_Correction_body_Picture_1.png, Forex Strategy: EUR/USD Bearish Engulfing Pattern Warns Of Correction

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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