EURUSD rejected the previous highs and is forming a bearish engulfing candle on the daily chart. Could this see prices move back towards the lows?
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The EURUSD is forming a strong bearish engulfing candle on the daily chart. This rejection from the previous highs shows strong selling pressure. The strength meter shows the Euro is the weakest currency. Fundamentally the ECB has not acted as quickly as other central banks in hiking interest rates in line with global inflation. All this confluence tells us the bias should remain bearish for the Euro.
With the daily chart forming a strong bearish close we could see the price move back towards the lows or even parity. If the price is going to move back to the lows we should see the price form lower highs and lower lows on the 4hr time frame. The previous support could turn resistance at 1.0220, if bearish price action forms here we could look for short trading opportunities.
Did you see our CADJPY Analysis? You can see it here.
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