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Forex Strategy - EUR/USD Ominous Clouds Gather Near 1.3900

Forex Strategy - EUR/USD Ominous Clouds Gather Near 1.3900

David de Ferranti, Currency Analyst

Talking Points

  • EUR/USD Technical Strategy: Sidelines Preferred
  • Dark Cloud Cover warning of a bearish reversal
  • Caution suggested when looking at trading a correction

A Dark Cloud Cover formation on the EUR/USD daily chart has emerged near the psychologically-significant 1.3900 handle. While the pattern is a bearish reversal signal, caution is suggested when looking to trade a correction for the pair, given a Shooting Star candle was seemingly shrugged off last week.

EUR/USD: Clouds Gather Near 1.3900

Forex_Strategy_-_EURUSD_Ominous_Clouds_Gather_Near_1.3900_body_Picture_2.png, Forex Strategy - EUR/USD Ominous Clouds Gather Near 1.3900

Daily Chart - Created Using FXCM Marketscope 2.0

Drilling down to the four hour timeframe; buyers appear to be supporting prices in intraday trade at the 1.3850 mark. Signs of a bullish reversal signal remain absent and a downside break would likely open up the next definite level of support at 1.3710.

EUR/USD: Supported In Intraday Trade

Forex_Strategy_-_EURUSD_Ominous_Clouds_Gather_Near_1.3900_body_Picture_1.png, Forex Strategy - EUR/USD Ominous Clouds Gather Near 1.3900

4 Hour Chart - Created Using FXCM Marketscope 2.0

By David de Ferranti, Market Analyst, FXCM

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DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.