Forex Strategy: EUR/USD Bearish Engulfing Pattern Suggests Further Declines
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- EUR/USD Technical Strategy: Short pending
- Bearish Engulfing pattern dominates intraday signals
- Buyers prepared to support prices at 1.3722
As noted in yesterday’s candlestick report the Bearish Engulfing formation on the hourly chart for EUR/USD was warning of potential declines ahead for the pair. We’re still yet to see a key reversal pattern emerge that could act as a bullish signal, leaving the bias to the downside for the Euro.
Buyers appear prepared to support prices at the 1.3722 mark in intraday trade, however going into European trading their resolve may be tested as more liquidity comes online. The daily chart is demonstrating significant resistance at the 1.3820 level which has capped gains in EUR/USD since October 2013. Against the backdrop of potential weakness over the next week, intraday bounces are seen as opportunities to enter new short positions.
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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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