- EUR/USD's bounce seems to have stalled at a key Fibonacci level.
- Wednesday's hammer candle is warning of an impending bearish move.
EUR/USD's recovery rally from recent lows below 1.10 has stalled around the key Fibonacci level and a pullback could be in the offing.
The currency pair has repeatedly failed to beat 1.1082 – 50% Fibonacci retracement of 1.1175/1.10989 – in the last three days.
More importantly, EUR/USD created a bearish hammer candle on Wednesday, warning of an impending bearish move.
The combination of persistent failure at the key level and bearish candlestick pattern indicates the market will likely test dip demand with a pullback to 1.1050. Acceptance below that level would validate Wednesday's bearish hammer and shift risk in favor of a re-test of the recent low of 1.0989.
A bullish revival needs a close above 1.1082 (50% Fib + hammer's high). The pair is currently trading at 1.1078, representing marginal gains on the day.
Daily chart
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Trend: Bearish
Technical levels
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