EUR/USD Downside Risk Remains With Reversal Candlesticks Lacking

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

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

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.

EUR/USD Downside Risk Remains With Reversal Candlesticks Lacking