Forex Strategy - EUR/USD Bearish Reversal Candles Hint At Correction

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Talking Points

  • EUR/USD Technical Strategy: Pending Short
  • Bearish reversal signal on daily awaits further confirmation
  • Hanging man on four hour chart warning of short-term correction

There are warning signs of a potential correction for the Euro on both the daily and four hour timeframes. A Hanging Man formation on the daily near the psychologically-significant 1.3900 handle has received confirmation from a successive down period. A correction lower may encounter buying support at the 23.6% Fib Retracement level at 1.3850.

However, the EUR/USD daily chart continues to be the focal point for traders. While a Shooting Star formation near multi-year trend line resistance is warning of declines, the uptrend remains intact. Further confirmation of a shift in the trend on the daily is needed before suggesting a near-term bearish technical bias.

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Forex_Strategy_-_EURUSD_Bearish_Reversal_Candles_Hint_At_Correction_body_Picture_2.png, Forex Strategy - EUR/USD Bearish Reversal Candles Hint At Correction

Hourly Chart - Created Using FXCM Marketscope 2.0

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Forex_Strategy_-_EURUSD_Bearish_Reversal_Candles_Hint_At_Correction_body_Picture_1.png, Forex Strategy - EUR/USD Bearish Reversal Candles Hint At Correction

Daily Chart - Created Using FXCM Marketscope 2.0

--- Written by David de Ferranti, Market Analyst, FXCM

Contact and follow David on Twitter: @Davidde

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