EUR/USD Bullish Engulfing Pattern May See Limited Follow-Through
- EUR/USD Technical Strategy: Shorts Preferred
- Bullish Engulfing Formation May Yield A Corrective Bounce
- Selling Into Rallies Preferred With Core Downtrend Intact
EUR/USDhas staged an about face after failing to crack the 1.3150 floor which has left a Bullish Engulfing formation in its wake. The key reversal pattern warns of a corrective bounce to fill the weekend gap. However, against the backdrop of a core downtrend, a more sustained recovery may prove difficult. This leaves selling into rallies preferred with a retest of 1.3240 likely to see pressure on the pair renewed.
Daily Chart - Created Using FXCM Marketscope 2.0, Volume Indicator Available Here
A Morning Star formation on the four chart offered an early indication of a potential bounce for the Euro. The clearance of the 1.3185 barrier alongside an absence of bearish reversal signals casts the spotlight on 1.3240.
EUR/USD: Morning Star Offered Early Indication Of A Bounce
4 Hour Chart - Created Using FXCM Marketscope 2.0, Volume Indicator Available Here
By David de Ferranti, Currency Analyst, DailyFX
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