EUR/USD Hammer To Warn Of Corrective Bounce If Confirmed

By DailyFx | Updated July 31, 2014 AAA

DailyFX.com -

Talking Points

  • EUR/USD Technical Strategy: Shorts Preferred
  • Hammer To Offer Bullish Signal If Confirmed
  • Downside Risk Remains With 1.3320 In Focus

EUR/USD’s downward trajectory may be at risk following the emergence of a Hammer formation on the daily. However, the bullish reversal pattern lacks the successive up-day required to confirm the signal. Additionally, given the proximity to resistance at 1.3400 a recovery may be a stretch at this stage. This leaves the spotlight on the 1.3320 mark.

EUR/USD: 1.3320 In Focus With Hanging Man Lacking Confirmation

EUR/USD Hammer To Warn Of Corrective Bounce If Confirmed

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

Drilling down to the four hour chart; a Morning Star pattern offers a bullish reversal signal in intraday trade. However, as noted above sellers remain prepared to cap the currency’s recovery at the 1.3400 handle. This casts doubt over the potential for a sustained bounce for the Euro.

EUR/USD: Morning Star Fails To Find Follow-Through With Resistance Nearby

EUR/USD Hammer To Warn Of Corrective Bounce If Confirmed

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

By David de Ferranti, Market Analyst, DailyFX

Follow David on Twitter: @Davidde

To receive David’s analysis directly via email, please sign up here.

Learn how to read candlesticks to help identify trading opportunities with the DailyFX Candlesticks Video Course.

You May Also Like

Related Forex Analysis
  1. Forex News

    Weekly Trading Forecast: How Far can the Dollar Go in 2014?

  2. Forex News

    US session recap: USD index and stocks rally for record highs

  3. Forex News

    US Dollar Targets Fresh Highs versus Euro, but What Could Change?

  4. Forex News

    A calm and holy night or a snowstorm of volatility? – ING

  5. Forex News

    Euro Struggles Ahead of Greek Election- USD/CAD Carves Lower Highs

Trading Center