EUR/USD Correction To Continue With Bullish Signal Missing
- EUR/USD Technical Strategy: Shorts Preferred
- Long upper wick on daily candle highlights significant selling pressure
- Bearish Engulfing pattern on four hour chart foreshadowed intraday dip
EUR/USDhas plunged after failing to claim the psychologically-significant 1.4000 handle in recent trading. The Harami formation near key resistance helped to indicate the bulls were losing steam. Additionally, the length of the upper wick and body of the daily candle suggests the bears have gained control of prices. The break below support at 1.3780 suggests the potential for further declines towards the next definitive level at 1.3670.
Daily Chart - Created Using FXCM Marketscope 2.0
A Bearish Engulfing pattern near 1.3950 offered an intraday signal that declines were on the way for the Euro. While the Asian session has yielded a couple of Doji formations which hint at some hesitation from the bears, they are not enough to suggest a bounce at this stage.
EUR/USD: Bearish Engulfing Pattern Sparks Declines
4 Hour Chart - Created Using FXCM Marketscope 2.0
By David de Ferranti, Market Analyst, DailyFX
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