EUR/USD Scope For Recovery May Be Limited In Spite Of A Piercing Line
- EUR/USD Technical Strategy: Sidelines Preferred
- Piercing Line Pattern Awaits Confirmation Near 2014 Low
- Dojis On H4 Suggested Fading Downside Momentum
EUR/USD’s recent rebound has yielded a Piercing Line formation, yet some skepticism over a recovery is warranted. The pattern requires a successive up-day in order to be validated and to suggest a base may have formed. This may prove a difficult feat given the sustained presence of a downtrend and the sellers still sitting nearby at the 1.2700 handle. Further, the Euro’s path lower over recent months has been littered with reversal signals that have failed to catalyze a recovery.
EUR/USD: Piercing Line Pattern Awaits Confirmation
Daily Chart - Created Using FXCM Marketscope 2.0, Volume Indicator Available Here
EUR/USD’s intraday recovery was preceded by a parade of Doji formations. The candlesticks suggested hesitation by the bears to lead the pair lower at the critical 1.2500 barrier. While an absence of reversal signals leaves some doubt over a correction, the context on the daily warns that scope for further gains may be limited.
EUR/USD: Dojis Denoted Indecision Near Psychological Barrier
4 Hour Chart - Created Using FXCM Marketscope 2.0, Volume Indicator Available Here
By David de Ferranti, Currency Analyst, DailyFX
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