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Talking Points

  • EUR/USD Technical Strategy: Shorts Preferred
  • Evening Star Emerges Following Test of 1.3440
  • Bullish Patterns Lacking, Suggesting Further Falls

EUR/USD’s woes may be set to persist with an Evening Star formation in its wake. While the candlestick pattern generally signals a potential top following a prevailing uptrend, in this case it may suggest sustained selling pressure. This puts the nearby floor at 1.3320 in focus. A daily close above 1.3440 would be required to invalidate a bearish bias at this stage.

EUR/USD: Faces Sustained Selling Pressure

EUR/USD May Extend Declines With An Evening Star In Its Wake

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

Drilling down to the four hour chart; a Harami pattern was initially met with little enthusiasm from traders, yet eventually saw the Euro edge lower. A Hammer formation appears to be emerging in intraday trade, yet would not warn of a recovery unless confirmed by a successive up period. Clearance of the nearby 1.3370 hurdle would also likely be required to yield any sustained gains.

EUR/USD: Hammer Awaits Confirmation Near Noteworthy Resistance

EUR/USD May Extend Declines With An Evening Star In Its Wake

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

By David de Ferranti, Market Analyst, DailyFX

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