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EUR/USD Retest Of 1.3500 To Offer New Short Entries

EUR/USD Retest Of 1.3500 To Offer New Short Entries

2014-07-24 10:57:00
David de Ferranti, Currency Analyst
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Talking Points

  • EUR/USD Technical Strategy: Shorts Preferred
  • Doji highlights hesitation following break below 1.3500
  • Absence of key reversal patterns casts doubt on a recovery

EUR/USD’s descent following the break of support at 1.3500 has stalled with a Doji formation indicating indecision from traders. However, the candlestick pattern is not classed as a bullish reversal signal, which leaves the prospect of a recovery for the pair as questionable. A retest of the 1.3500 handle would be seen as an opportunity to enter new short positions, while a daily close above the now-resistance level would invalidate a bearish technical bias.

EUR/USD: Retest Of 1.3500 To Offer New Short Entries

EUR/USD Retest Of 1.3500 To Offer New Short Entries

Daily Chart - Created Using FXCM Marketscope 2.0, Volume Indicator Available Here

Drilling down to the four hour chart; a sea of Doji candlesticks near 1.3455 suggested significant hesitation from the Euro bears to push the single currency lower. However, similarly to the daily chart; key reversal patterns remain absent. This suggests a recovery may prove short-lived.

EUR/USD: Absence of Key Reversal Patterns Casts Doubt On A Recovery

EUR/USD Retest Of 1.3500 To Offer New Short Entries

4 Hour Chart - Created Using FXCM Marketscope 2.0, Volume Indicator Available Here

By David de Ferranti, Market Analyst, DailyFX

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