EUR/USD: "Engulfing" pattern pushing the price higher - ConsultFX

EUR/USD: "Engulfing" pattern pushing the price higher


As we can see on the Weekly chart, the lower 'Window' is acting as strong support, so the market is consolidating. There're a variety of bearish and bullish patterns, but the last 'Shooting Star' pattern is still in force, so the price is likely going to test the nearest support at 1.1210 by the last 'Hammer' pattern. Also, a bearish 'Three Methods' pattern remains on the table, which provides more evidence for this scenario

Note that the 3 Line Break Chart is bullish, but the Heiken-Ashi Indicator is bearish again, which highlights an opportunity to have another decline. If a pullback from 1.1210 happens next, there'll be a green light for a local upward correction. In this case, we should keep an eye on the 89 Moving Average as a possible bullish target.

Let's have a look at the Daily chart, where the pair is moving sideways. There's a bearish 'Harami' pattern, which has been formed on the 89 Moving Average. Also, there're several pullbacks from the lower 'Window', which has acted as support many times before.

Despite that both 3 Line Break Chart and Heiken-Ashi Indicator are bearish, we should focus on the last bullish 'Engulfing' pattern, which formed on the 'Window'. Therefore, the pair is likely going to reach the 55 Moving Average in the coming days. The subsequent pullback from this line could be a departure point for a decline in the direction of the previously tested support at 1.1210.

The material has been provided by InstaForex Company -