Formation of reversal pattern on daily chart signals deeper pullback

Slobodan Drvenica Windsor Brokers

The cross dips below 0.90 handle (reinforced by rising 10DMA) as pound was inflated by strong UK retail sales data and the single currency got hurt by renewed political turmoil in Italy.

Bulls also showed signs of stall on Wednesday’s Doji candle, with today’s fresh weakness being on track to complete reversal pattern on daily chart.

Weaker momentum and south-turning stochastic and RSI support scenario, which would require close below 0.90 level as initial negative signal.

Extension below 20DMA (0.8971) and 30DMA (0.8948) is needed to confirm reversal and shift focus lower.

Conversely, holding above 0.90 handle would keep bullish bias intact, with narrow consolidation seen preceding fresh attempts higher.

Res: 0.9009; 0.9038; 0.9050; 0.9087
Sup: 0.8971; 0.8948; 0.8920; 0.8872

Author

Slobodan Drvenica

Windsor Brokers

Industry veteran with over 22 years’ experience, Slobodan Drvenica joined Windsor Brokers in 1995 when he was an active trader for more than 10 years, managing the trading desk and own account departments.

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