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EUR/USD Downside Risks Remain In Absence of Reversal Candlesticks

EUR/USD Downside Risks Remain In Absence of Reversal Candlesticks

David de Ferranti, Currency Analyst

Talking Points

  • EUR/USD Technical Strategy: Shorts Preferred
  • Bullish Engulfing Pattern Fails To Find Confirmation
  • Break Of Nearby Support To Open 1.3100 Target

The Euro is set for a make-or-break moment on a test of the recent lows near 1.3320 with bullish reversal signals absent. Given the proximity to nearby buying support at 1.3320 new shorts may be better served on a downside break. This would set the stage for a push to the September 2013 lows near 1.3100.

EUR/USD: Bullish Engulfing Formation Fails To Find Follow-Through

EUR/USD Downside Risks Remain In Absence of Reversal Candlesticks

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

Drilling down to the four hour chart; a Hammer formation near 1.3340 offered an indication for an intraday recovery for EUR/USD. However, since resuming its descent there is glaring absence of reversal signals which suggests a recovery for the pair over the session ahead may prove difficult.

EUR/USD: Hammer Fails To Sustain Recovery

EUR/USD Downside Risks Remain In Absence of Reversal Candlesticks

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

By David de Ferranti, Market Analyst, DailyFX

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