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Talking Points

  • EUR/USD Technical Strategy: Shorts Preferred
  • Absence of key reversal patterns casts doubt on a recovery
  • Daily Close Below 1.3400 To Open Support At 1.3320

EUR/USD may be primed to continue its descent with a void of key reversal candlesticks on the daily. Several Dojis evident on the pair’s drift lower suggested some hesitation from traders yet were insufficient to yield a shift in sentiment for the Euro. While buying support at 1.3400 may slow EUR/USD’s decline an eventual break would pave the way for a run on the 1.3320 mark.

EUR/USD: Break of Psychologically-Significant 1.3400 Handle To Open 1.3320

EUR/USD Downside Risk Remains With Reversal Candlesticks Lacking

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 1.3400 suggests significant hesitation from the Euro bears to push the single currency lower. However, similarly to the daily chart; key reversal patterns remain absent, suggesting further declines are on the cards.

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

EUR/USD Downside Risk Remains With Reversal Candlesticks Lacking

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

By David de Ferranti, Market Analyst, DailyFX

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